NEED TO KNOW

On 16 May 2013, Justice Tracey, in the Federal Court, handed down his decision in Pipe Networks Pty Ltd v Commonwealth Superannuation Corporation,1   a case relating to the construction of Schedules 1 and 3 of the Telecommunications Act 1997 (Cth) (the Act).

Schedule 1 of the Act sets out a regime for one carrier to access another carrier’s facilities on agreed or arbitrated terms, which normally include a fee for access.  Schedule 3 provides carriers with statutory powers to require a land owner / occupier to provide access to land in order for the carrier to install, operate and maintain facilities. 

The case considered whether PIPE Networks Pty Limited (PIPE), a licensed carrier, was authorised by a land access and activity notice (LAAN) issued under Schedule 3 of the Act to install two fibre optic cables in the building at 101 Collins Street, Melbourne (the Building) and, if so, whether it still needed to negotiate the terms of access Part 3 of Schedule 1 of the Act (including payment of a fee). 

On 20 June 2013, Justice Tracey declared that:

  • the LAAN issued under Schedule 3 authorised PIPE to carry out the installation inside the Building pursuant to Schedule 3;
  • PIPE was entitled to enter and occupy the Building and do anything necessary or desirable for the purposes of carrying out the installation; and
  • PIPE was not required to negotiate the terms of access (including any fee) to the Building under Schedule 1 as well.2

The decision clarified some key concepts in Schedule 3, including the scope of carriers’ installation powers and the definition of “land”.  It also considered the interaction between Schedule 1 and Schedule 3. 

While the decision may seem like bad news for building owners, it is actually more of a clarification of the current law.  Carriers have always had the power to require access to land using their Schedule 3 carrier powers where they could not negotiate terms of access with the owner or occupier of facilities.  However, Schedule 3 has its own administration and compensation requirements, including compensation for financial loss or damage that occurs as a result of the use of powers.  In reality it may still be quicker and easier for carriers to negotiate a facilities access agreement under Schedule 1 than exercise their carrier powers under Schedule 3.

THE PROCEEDINGS

The proceedings related to PIPE’s attempt to install further fibre optics cables in the MDF room inside the Building pursuant to the LAAN that PIPE served on the Commonwealth Superannuation Corporation (CSC) (the owner of the Building) and 101 Collins Street Pty Limited (101 Collins) (the managing agent for the Building).   PIPE did not serve a copy of the LAAN on any individual occupiers of the building, including Macquarie Bank Limited (Macquarie).

In September 2011 (after PIPE had served the LAAN), CSC and 101 Collins advised PIPE that “operational control” over the Building had been granted to Property Communications Management International Pty Limited (PropertyComm), a carrier under the Act.  Shortly after, when PIPE gave 101 Collins notice that it proposed to enter the building to install further cabling pursuant to Schedule 3 of the Act, the Respondents denied access unless and until PIPE entered into a facilities access agreement with PropertyComm under Schedule 1 of the Act, a condition of which was that PIPE pay PropertyComm a fee.

PIPE sought declarations from the Federal Court that it was entitled to access the Building and carry out the installation pursuant to the LAAN, and an order restraining the Respondents from refusing access to the Building and preventing PIPE from carrying out the installation.

The respondents contended that Schedule 3 did not empower PIPE to install the cable for a number of reasons (discussed below).  Underlying the proceedings was a dispute between the parties as to whether PIPE could be required to pay a fee to obtain access to the Building for the purpose of installing and maintaining its cabling and other equipment (as distinct from simply compensating the carrier for loss and damage under Schedule 3).

THE ISSUES

The key issues before his Honour were:

  • Whether the authority, conferred on a carrier by Schedule 3 to enter “land”, applies to a carrier wishing to have access to a multi-storey office building;
  • If so, whether PIPE had complied with all of the notification requirements prescribed by Schedule 3;
  • Whether the communications riser and the MDF room in the Building were “facilities” within the meaning of Part 3 of the Schedule 1; and
  • Whether any right to install facilities under Schedule 3 is subject to the requirements of Part 3 of Schedule 1.

DOES SCHEDULE 3 ENABLE ACCESS TO A MULTI-STOREY OFFICE BUILDING?

Clause 6(1)

Justice Tracey held that clause 6(1) (b) authorised PIPE to enter the Building in order to carry out the proposed installation, whether or not the Building, the MDF room or the communications riser constituted “land” within the meaning of clause 6(2).  His Honour found that clause 6(1)(b) is unconfined as to time and place, and that the power conferred by it is available so long as the facility is one which (as here) falls within the meaning of a “low-impact facility” and the carrier’s purposes is connected with the supply of a carriage service.

“Land” under clause 6(2)

While the authority to install “lowimpact facilities” is found in clause 6(1) and does not depend on clause 6(2), his Honour went on to consider PIPE’s alternative submission that the word “land” in clause 6(2) comprehends high rise buildings and facilities within them such as the MDF room and the communications riser.

His Honour rejected PIPE’s alternative submission, and found that clause 6(2) empowers activities at ground level rather than in structures built on the ground.

NOTIFICATION TO BUILDING OCCUPIERS

Clause 17(1)(b) of Schedule 3 requires that PIPE give notice to occupiers of the land on which it wished to carry out the installation work.  As a consequence of his Honour’s finding regarding clause 6(2), Justice Tracey held that PIPE was not required to give notice to Macquarie under clause 17(1)(b) of Schedule 3 as the Building and the part of it which was tenanted by Macquarie was not land within the meaning of Schedule 3.  His conclusion on this point was also expressly influenced by the fact that Macquarie had invited PIPE to perform the work and had waived any right it may have had to be given notice under clause 17(1).  It may have also been influenced by the fact that notices were given to CSC and 101 Collins.

APPLICATION OF SCHEDULES 1 AND 3

“Facilities” in Schedule 1

Justice Tracey held that the meaning of “facility” in clause 17 of Schedule 1 is broader than that accorded to the same term in Schedule 3.  Tracey J held that the parts of the Building to which PIPE sought access are “facilities” under Schedule 1 as, for the limited purpose of clause 17(1) of Schedule 1, “facilities” refers to not only to facilities as defined by section 7 of the Act but also to a building or structure which is on land on which such a facility is located.  Accordingly, the Building, the MDF room and the communications riser were facilities within the meaning of clause 17 of Schedule 1.

Application of Schedule 1 and its interaction with Schedule 3

Clause 52 in Schedule 3 provides that the Schedule does not authorise a carrier to engage in installation activities contrary to the requirements “of another law of the Commonwealth”.  Justice Tracey held that, if Schedule 1 applied, it could be regarded as an inconsistent law of the Commonwealth under clause 52.  This would mean that Schedule 1 applied to the exclusion of Schedule 3 to the extent of any inconsistency, and PIPE would be required to enter into an agreement with, and pay a fee to, PropertyComm. 

However his Honour did not consider that Schedule 1 had been triggered in this instance because PIPE had not requested access from PropertyComm under clause 17(1) of Schedule 1.  The Respondents’ demands that PIPE negotiate an agreement with PropertyComm as a precondition to PIPE exercising its acknowledged rights under Schedule 3 were therefore without basis.

IMPLICATIONS FOR CARRIERS AND BUILDING OWNERS

The decision clarifies the construction of Schedules 1 and 3 of the Act.  The Court is to prefer the construction which best promotes the purpose or object of the Act, which is to promote the long term interests of end-users of telecommunications services.  Allowing building owners to exploit the control they exercise over buildings by restricting carriers’ access would not promote the legislative objects.   However, the decision does not indicate that the Court would go so far as to require a building owner to take positive action to facilitate a carrier’s installation activities.

Furthermore, the decision does not make facilities access agreements between carriers redundant.  In practice it is often quicker and easier to negotiate a facilities access agreement than it is to exercise the powers under Schedule 3 to require access to land.