Property and Legal address the need for specialised, expert advice that is commercially viable and practical.

The Pipe Networks Case 10 Years on: An unresolved access loophole for carriers

Back in 2013, the 101 Collins Street case: Pipe Networks Pty Ltd v Commonwealth Superannuation Corporation made waves in the telecommunications space for its implications for telco carriers’ facility access rights. The peculiarities of the decision and judgement were thoroughly discussed by interested parties at that time.

With Amendments to the Telecommunications Carrier Powers and Immunities Framework currently underway, it is an appropriate time to revisit the implications of this case and relevant issues that could be addressed as part of the amendments being considered.

Almost a decade on from Pipe Networks, we take a look at the case, the decision, and its continued impact on the telecommunications industry. There are several oddities in this case that have created many questions in the telecommunications industry, and can be quite confusing to digest. For this reason, in this article we will focus on the elements of the decision relating to the functions of Schedule 1 and Schedule 3 to the Telecommunication Act 19972.

Part two of our review of the Pipe Networks case and its impact will follow next week, and break down the decisions relating to service of LAAN notices and the application of Schedule 3 of the Act.

The parties

  • CSC: the owner of the 101 Collins Street building
  • 101: the building manager
  • Pipe Networks: the telecommunications carrier seeking to install equipment in the building. Pipe Networks is in possession of a carrier licence.
  • PropertyComm: a company given “operational control” by CSC of the telecommunications equipment and facilities in the building. PropertyComm is in possession of a carrier licence.

The case

Among other things, the case considered whether Pipe Networks could validly serve a LAAN notice under Schedule 3 of the Act to install a low-impact facility within the building at 101 Collins Street, or whether Schedule 1 (specifically Clause 17(1), Schedule 1) would override Schedule 3.

If Schedule 1 were to apply, it would ultimately force Pipe Networks to negotiate with PropertyComm as another carrier at the facility. This would enable PropertyComm to negotiate a rental income and other commercial terms from Pipe Networks.

The decision handed down by Justice Tracey on 16 May 2013, and later affirmed on appeal, was that Pipe Networks could enter the building and install their equipment by issuing the LAAN (pursuant to Schedule 3 of the Act). Schedule 1 was not enlivened as they had not made a request for access under s17(1) Schedule 1.

Essentially, this meant a loophole had been created whereby the entirety of Schedule 1, including the Facilities Access Code, could be sidestepped by any carrier wishing to install a low-impact facility without agreeing to pay any rental to the building owner or manager.

The intent

Judge Tracey discussed in his judgement the legislative intent, highlighting that the Act seeks to allow carriers to easily install more equipment, to encourage the industry to expand its collective ability to provide services, and to promote competition between carriers to create better services for consumers.

It is difficult to reconcile this legislative intent with Judge Tracey’s interpretation of the Act in such a way that makes carrier cooperation essentially optional. Schedule 1, in conjunction with the Facilities Access Code therein, is designed to promote cooperation between carriers so that facilities can be shared in an efficient manner. This also helps to avoid the construction of superfluous telco equipment.

The loophole

Judge Tracey found that for Schedule 1 to be enlivened, thereby requiring carriers to cooperate to negotiate mutual access to facilities and compliance with the Facilities Access Code, a carrier must make a request for access under s17(1) Schedule 1. Yet, serving a LAAN notice under Schedule 3 of the Act was found not to amount to a request under schedule 1.

The result of this interpretation is a loophole that can be used to a carrier’s full advantage. If, for instance, a second carrier wishes to install a low-impact facility on the original carrier’s facility, they can simply choose to serve a LAAN notice and follow the process set out in Schedule 3 of the Act. In this way, they avoid having to negotiate with the first carrier regarding access – who will almost always require that the second carrier pay rental.

Of course, the first carrier can rely on the process in Schedule 3 to object to the second carrier’s LAAN and installation, but this can be a lengthy, complicated and expensive process that may result in the second carrier winning the right to install their equipment regardless.

Should the second carrier choose to serve a LAAN, however, they will still be bound by the obligations and restrictions in Schedule 3 and the Telecommunications Code of Practice 2018.

The Implications

Despite the loophole created by Judge Tracey’s interpretation, carriers may still find it faster and easier to simply request access under s17(1) Schedule 1 and negotiate with the first carrier located at the site to install their equipment. Consequently, the provisions of Schedule 1 are not made entirely redundant by the Pipe Networks case – but they can, in various circumstances, be sidestepped completely by a carrier wishing to install a low-impact facility without paying any rental.

Such a carrier ought to be wary of this approach, however. The Facilities Access Code contained in Schedule 1 of the Act has been updated since the Pipe Networks decision, as part of a broader review of the Act and telecommunications legislation generally.

These updates to the Code seem incomplete and potentially redundant without closing the aforementioned loophole as carriers can simply avoid enlivening Schedule 1 and therefore avoid the requirement to comply with the Code altogether.

We consider the government would be prudent to address the loophole created by Pipe Networks as part of the review of telecommunications legislation currently underway.

In our soon to be published second article on the Pipe Networks case, we will further discuss the aspect of the case relating to service of LAAN notices and the application of various aspects of Schedule 3 of the Act.


Related resources: