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Australia’s government IT services firm is a ‘distribution company’, says minister

AUSTRALIA’S federal government IT service provider, Aereo, has been branded a “distribution corporation” by the Communications Minister, Anthony Albanese.

The Communications Minister has labelled the company a “Distribution Company” under the Telecommunications Act and warned that it could be subject to a possible fine if it fails to comply with the Telecommunications Services Act.

In a statement, the Department of Communications said it was aware of the Department’s concerns about Aereo and the potential liability it could face under the act.

“In its submission to the Australian Competition and Consumer Commission (ACCC) in February, Acast claimed that its technology could enable it to offer its content without paying the commission, and the submission cited Aereo’s ability to offer a free tier to Australians,” it said.

“The submission further claimed that Acast’s ‘broadcasting services’ were exempt from the Telecommunications Service Act.”

As the Commission has made clear, the Commission will not be applying this exemption to Acast or its subsidiaries.

“Furthermore, the Minister has indicated that Aereo could be in breach of the Telecommunications Transaction Reports Act and would be required to file with the ACCC.”

The Communications Ministry said Aereo did not have any current contracts with the Government and that it had no legal obligation to provide telecommunications services to the Government.

“Aereo has provided telecommunications services that are exempt from both the Telecommunications (Interception and Access) Act (TIAA) and the Telecommunications Companies Act (TCA) to the extent that those services are provided in accordance with its contractual arrangements with the relevant Government agencies,” it added.

Mr Albanese’s comments come as the Federal Government is in the process of revising its Telecommunications Services (Consumer Protection) Bill to provide a clearer definition of “distributors” and clarify whether telecommunications providers are required to pay the commission.

The government is expected to publish the new legislation on Thursday.

The bill, which will require the Federal Court to hear cases concerning the conduct of telecommunications providers, will also require the ACCCC to provide the government with information about its telecommunications business, and provide the Government with an update on the compliance of Aereo with the Communications Act.

Last month, Mr Albanese said the Communications Authority, the body responsible for regulating the telecommunications industry, needed to take a more active role in regulating Aereo.

“It’s very clear that the Telecommunications Authority should take a much more active part in regulation of Acast and its subsidiary companies,” he said.

Mr Aloisi said the government had already issued guidelines that the Communications Ministry should follow to ensure it did not get in the way of its duties.

“This includes guidance on whether a company is a distributor, which has already been clarified by the ACCCs own guidelines,” he told the ABC.

“If the Communications Department wants to do anything about Acast, it needs to go to the ACC Commission and demand a declaration that it is a distribution company.”

Mr Albanes comments come amid reports of a crackdown on Aereo by the Australian Communications and Media Authority (ACMA), which oversees the sector.ACMA director Mark Butler has said he was “very concerned” about A.T.M.A.s inability to pay its debts.

Mr Butler said the A.C.M.’s actions were “outrageous” and were contrary to the Act.

Aereo is not the only company to be investigated by the regulator.

Last year, the Federal Trade Commission fined the Australian arm of a US entertainment firm, Viacom, $1.9 billion for allegedly defrauding the government of millions of dollars.

In February, the Communications Security Authority (CSA) fined the former CEO of Australia’s largest phone provider, Telstra, $2.4 million for allegedly breaching the Communications Transaction Reports (CTRs) Act by refusing to disclose details of a $5 billion contract with Aereo in 2014.


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