Australian Communications and Media Authority (Modifications to Apparatus and Spectrum Licences Taxes) Direction 2020

The Direction rests on a small number of interlocking legal and financial concepts defined and implemented by the instrument.

EME Components. The Direction distinguishes a Historical EME Component and a New EME Component. The Historical EME Component is the 0.8% annual component of the Transmitter Licence Tax and the Receiver Licence Tax that was historically used to offset government expenditure on research, information and engagement about the health effects of electromagnetic energy (s 4(1) Historical EME Component). The New EME Component is the component of the Spectrum Licence Tax that will be used for the same government purposes (s 4(1) New EME Component).

Determinations and taxes. The Direction operates by instructing ACMA to amend three existing statutory determinations that specify how licence taxes are calculated and applied: the Radiocommunications (Transmitter Licence Tax) Determination 2015 (Transmitter Determination), the Radiocommunications (Receiver Licence Tax) Determination 2015 (Receiver Determination) and the Radiocommunications (Spectrum Licence Tax) Determination 2014 (Spectrum Determination), each as in force at 30 June 2020 (s 4(1)). The Direction does not itself change the Radiocommunications Acts or the tax Acts; it requires ACMA to change the Determinations that give effect to the taxes imposed under the Radiocommunications (Transmitter Licence Tax) Act 1983, the Radiocommunications (Receiver Licence Tax) Act 1983 and the Radiocommunications (Spectrum Licence Tax) Act 1997 (s 4(1) definitions and s 4(2)).

Scope of affected licences. The Direction focuses the Spectrum tax changes on Designated Spectrum Licences. The definition of Designated Spectrum Licence identifies licences issued under Part 3.2 of the Radiocommunications Act 1992 but expressly excludes licences issued to Commonwealth Departments of State, certain Executive Agencies and Statutory Agencies, licences conditioned to be used only for television outside broadcasts, and licences conditioned to be used only for rail safety, operations or control (s 4(1) Designated Spectrum Licence). Receiver and transmitter licences are those defined in the Radiocommunications Act 1992 and addressed by their corresponding Determinations (s 4(1) receiver licence, transmitter licence).

Temporal and administrative mechanics. The instrument sets specific holding dates that determine which licence holdings are in scope for the rebate/removal or the apportionment. Spectrum Holding Date is 11 October 2020 and 11 October in each subsequent financial year (s 4(1) Spectrum Holding Date). Transmitter Holding Date and Receiver Holding Date are any time during the financial year commencing 1 July 2020 and each subsequent financial year (s 4(1)). The Direction requires the Transmitter and Receiver Determination amendments to be completed before 1 July 2020 and to apply to licences held on the relevant Holding Dates (s 5(3), (6)). For the Spectrum Determination, amendments giving effect to the specified combined EME component for the first three financial years must be made within five months of commencement and have effect on and from 11 October 2020; for later years the amendments must be made no later than 20 days before each Spectrum Holding Date (s 6(4)(a), (5)(a)).

Apportionment standard and labelling. ACMA must adopt objective and equitable criteria for apportioning the Combined Spectrum Tax EME Component among Designated Spectrum Licence holders and must have regard to the total amount of spectrum each holder may use and any other matter ACMA considers relevant (s 6(3)). ACMA must discretely designate and label the component representing the increase in the Spectrum Licence Tax arising from this Direction as the “EME Component” in a clear and unambiguous way (s 6(4)(b), (5)(b)).

Limits and ongoing powers. The Direction caps the overall amount of EME-related revenue that may be collected through the Spectrum Licence Tax for each specified year (s 6(1)(a)-(d)) and caps subsequent increases by reference to an annual CPI factor not to exceed the Australian Statistician’s published factor for June (s 6(2)). The Direction also expressly states that apart from the directions in sections 5 and 6, it is not intended to limit or prevent ACMA from exercising its powers under the tax Acts to vary the amounts of licencing taxes at other times (s 4(2)).

The Direction affects three institutional groups and the holders of certain licences.

ACMA. The primary actor required to act is ACMA. The Direction is a statutory direction under section 14 of the ACMA Act (s 3). It requires ACMA to amend specified Determinations in defined ways and within defined timeframes (s 5, s 6). ACMA must adopt objective and equitable criteria in apportioning the Spectrum EME Component and must perform discrete labelling duties (s 6(3), (4)(b), (5)(b)). The Direction also leaves ACMA with the ongoing capacity to exercise other statutory powers to vary licence taxes outside the prescribed adjustments (s 4(2)).

Licence holders who pay transmitter and receiver licence taxes. Holders of transmitter licences and receiver licences are directly affected because the Direction requires ACMA to remove the Historical EME Component from their respective licence taxes to the greatest extent practicable (s 5(1), (4)). The Direction provides an exception: if ACMA is satisfied that a Historical EME Component was never included in, or has ceased to be included in, the Transmitter or Receiver Licence Tax payable by a particular holder, the obligation to remove does not apply for that holder (s 5(2), (5)). The Direction requires the amendments to apply to licences held on the relevant Holding Dates, which for transmitter and receiver licences are defined as any time during the financial year commencing 1 July 2020 and each subsequent financial year (s 5(3), (6); s 4(1) Transmitter/Receiver Holding Date).

Licence holders who pay spectrum licence tax. Holders of Designated Spectrum Licences are affected because the Direction requires ACMA to ensure the Spectrum Licence Tax includes a New EME Component apportioned among those licence holders, up to the specified combined caps for each year (s 6(1)). The Direction requires ACMA to adopt objective and equitable apportionment criteria and to have regard to the total amount of spectrum each holder may use under its licences (s 6(3)). Designated Spectrum Licences are defined to exclude certain Commonwealth departments, specified executive and statutory agencies, licences restricted to television outside broadcasts, and licences restricted to rail safety, operations and control (s 4(1) Designated Spectrum Licence). Thus some spectrum licence-holders are excluded from bearing the New EME Component.

The Australian Government’s EME-funded activities. The Direction explicitly reallocates funding flows: it removes the Historic EME Component from transmitter and receiver licence taxes and transfers the practice of funding EME-related government work to the Spectrum Licence Tax via a New EME Component (s 4(1) Historical EME Component; New EME Component; s 5; s 6). The Direction therefore shifts who is charged for a particular bundle of government-funded activity.

Tax administration and billing. Entities responsible for implementing licence tax collections, billing and record-keeping at ACMA will need to change the Determination texts, labelling and calculation methods so that invoices and tax records reflect the removal of Historical EME Components from some taxes and the discrete “EME Component” in the Spectrum Licence Tax (s 6(4)(b), (5)(b)). Timing requirements and holding date definitions determine which licences and billing periods are affected (s 4(1); s 5(3), (6); s 6(4)(a), (5)(a)).

Entities excluded from Designated Spectrum Licence burdens. Commonwealth Departments of State, the Executive Agencies established under s 65 of the Public Service Act 1999 and Statutory Agencies within the meaning of s 7 of the Public Service Act 1999, certain TV outside-broadcast licences and rail safety/control/operations licences are not Designated Spectrum Licences and therefore not within the pool among which the New EME Component is apportioned (s 4(1) Designated Spectrum Licence).

Statutory origin of the Direction. The Direction is issued under s 14 of the ACMA Act (s 3). That confers a ministerial power to direct ACMA; the Direction specifies how ACMA must modify particular Determinations. ACMA’s duties under the Direction are therefore ministerially directed administrative obligations, not novel statutory taxes created by the Direction itself.

ACMA’s duties. The Direction imposes several concrete duties on ACMA.

• Amend the Transmitter Determination to remove the Historical EME Component from the Transmitter Licence Tax “to the greatest extent practicable” where relevant (s 5(1)). If ACMA is satisfied the Historical EME Component was never or has ceased to be included for a holder, the removal duty does not apply for that holder (s 5(2)). Any required amendments must be made before 1 July 2020 and must apply to all transmitter licences held on a Transmitter Holding Date (s 5(3); s 4(1) Transmitter Holding Date).

• Amend the Receiver Determination to remove the Historical EME Component from the Receiver Licence Tax “to the greatest extent practicable” where relevant (s 5(4)), subject to the same exception if the Historical EME Component was never or has ceased to be included (s 5(5)). Any required amendments must be made before 1 July 2020 and must apply to receiver licences held on a Receiver Holding Date (s 5(6); s 4(1) Receiver Holding Date).

• Amend the Spectrum Determination so that the Spectrum Licence Tax imposed in respect of all Designated Spectrum Licences on each Spectrum Holding Date includes an amount attributable to the New EME Component no greater than the combined caps specified for each fiscal year (s 6(1)(a)-(d)). ACMA must determine apportionment using objective and equitable criteria and have regard to the total amount of spectrum each holder may use and other relevant matters (s 6(3)). ACMA must make changes for the first three years within five months of commencement and have the change take effect on and from 11 October 2020, and for later years make the amendments no later than 20 days before each Spectrum Holding Date (s 6(4)(a); s 6(5)(a)). ACMA must clearly and unambiguously designate and label the component as “EME Component” within the Spectrum Determination (s 6(4)(b); s 6(5)(b)).

Rights and preserved powers. The Direction provides an exception mechanism and preserves ACMA’s statutory powers. If ACMA is satisfied that a Historical EME Component was never, or has ceased to be, included in the Transmitter or Receiver Licence Tax for a particular holder, the duty to remove does not apply in relation to that tax for that holder (s 5(2), (5)). Separately, the Direction explicitly states that apart from the directions in sections 5 and 6, nothing in the Direction is intended to limit or prevent ACMA from exercising its powers under the Radiocommunications tax Acts to vary the amount of the Receiver Licence Tax, Spectrum Licence Tax or Transmitter Licence Tax to be imposed on relevant licences for any purpose at any other time (s 4(2)). In practice that means ACMA retains its general statutory discretion to change tax settings under the underlying tax statutes, subject to compliance with this Direction for the matters and periods it covers.

Label and accounting duty. ACMA must discretely designate and label the spectrum tax increase arising from the Direction as the “EME Component” in a clear and unambiguous way (s 6(4)(b), (5)(b)). That imposes a duty about presentation and record-keeping in the Determination.

Timing duties. ACMA faces explicit timing duties: Transmitter/Receiver Determination amendments before 1 July 2020 applicable to licences held on the Holding Dates (s 5(3), (6)); Spectrum Determination amendments for the first three years within five months of commencement and effective from 11 October 2020 (s 6(4)(a)); for later years amendments no later than 20 days before the applicable Spectrum Holding Date (s 6(5)(a)).

Who decides. The Minister made the Direction (Minister for Communications, Cyber Safety and the Arts, dated 15 May 2020). ACMA is the implementing decision-maker who must act in accordance with the Direction (s 3; s 5; s 6). In determining apportionment ACMA is given positive criteria to apply: objective and equitable criteria and regard to spectrum amounts and any other relevant matters (s 6(3)).

No penalties in the Direction. The Direction itself does not create criminal or civil penalties, nor does it set out enforcement procedures against licence-holders who do not pay taxes. The Direction operates by instructing ACMA to change Determinations that specify tax amounts and collection mechanisms under separate tax Acts (s 4(1)). Any penalties for non-payment will therefore continue to be those established in the Radiocommunications tax Acts and associated collection regimes; they are not set out in this Direction.

The Direction does not itself establish penalties, offences or an enforcement regime against licence-holders. It is a ministerial direction to ACMA to change statutory determinations that underpin licence taxes; the Direction prescribes how ACMA must amend those Determinations and when the amendments must be made and take effect (s 5, s 6). Consequently, the text contains no provisions imposing penalties for non-compliance by licence-holders with the Direction. Any enforcement consequences for licence-holders continue to derive from the underlying tax Acts and the Radiocommunications Act framework that govern the imposition and collection of Transmitter, Receiver and Spectrum Licence Taxes, which the Direction references and relies upon (s 4(1) definitions).

What the Direction does prescribe that could give rise to compliance action is procedural and administrative on ACMA. ACMA is required to make specific amendments, adopt objective and equitable apportionment criteria, ensure discrete labelling of the EME Component and meet specified timeframes (s 5(1)-(6); s 6(1)-(5)). Failure by ACMA to carry out those duties may attract administrative law remedies available in the general law, for example judicial review of administrative action, but the Direction itself contains no statutory enforcement mechanism, sanction, or fine tied to non-performance. The Direction also preserves ACMA’s existing legal powers to vary licence taxes under the Radiocommunications (Receiver Licence Tax) Act 1983, the Radiocommunications (Spectrum Licence Tax) Act 1997 and the Radiocommunications (Transmitter Licence Tax) Act 1983 except as constrained by the specific directions in sections 5 and 6 (s 4(2)).

For licence-holders, the practical enforcement point is that the amounts charged as Transmitter, Receiver or Spectrum Licence Tax will continue to derive from the relevant Determination as amended. After ACMA updates Determinations in response to the Direction, licence-holders will be liable to pay amounts set out in the new Determinations and in accordance with the collection and penalty provisions of the underlying tax statutes. The Direction mandates that the combined EME Component be discretely designated and labelled “EME Component” in the Spectrum Determination (s 6(4)(b), (5)(b)). Licence-holders should therefore expect to see the label and a changed calculation basis in ACMA’s invoices or notices once amendments take effect; any complaint about the content or calculation would be addressed through the usual administrative and statutory dispute mechanisms that govern tax notices, not by remedies contained within this Direction.

It is notable that the Direction uses qualifying language such as “to the greatest extent practicable” in directing removal of the Historical EME Component from transmitter and receiver taxes (s 5(1), (4)). That expression allocates operational judgment to ACMA about the extent of removal. The Direction does not specify review mechanisms or default remedies should ACMA decline to remove Historical EME Components for particular licences where ACMA is satisfied they were never or have ceased to be included (s 5(2), (5)). The Direction likewise leaves room for ACMA to exercise other powers to vary tax amounts at other times (s 4(2)), meaning that the administrative and statutory enforcement architecture outside this Direction remains the operative regime for any disputes about tax imposition.

This Direction is closely interwoven with several existing statutory instruments and Acts that govern radiocommunications licence taxes and ACMA’s operation. It exercises the ministerial Direction power under section 14 of the Australian Communications and Media Authority Act 2005 (s 3). The Direction operates by requiring amendments to three statutory Determinations which are themselves instruments made under the Radiocommunications-related tax Acts and the Radiocommunications Act 1992.

References to the Radiocommunications framework. The Direction defines terms and targets instruments that are part of the radiocommunications legislative architecture. It references:

• The Radiocommunications (Transmitter Licence Tax) Determination 2015 as in force at 30 June 2020 (Transmitter Determination) (s 4(1)) and the Transmitter Licence Tax imposed by the Radiocommunications (Transmitter Licence Tax) Act 1983 (s 4(1)).

• The Radiocommunications (Receiver Licence Tax) Determination 2015 as in force at 30 June 2020 (Receiver Determination) and the Receiver Licence Tax imposed by the Radiocommunications (Receiver Licence Tax) Act 1983 (s 4(1)).

• The Radiocommunications (Spectrum Licence Tax) Determination 2014 as in force at 30 June 2020 (Spectrum Determination) and the Spectrum Licence Tax imposed by the Radiocommunications (Spectrum Licence Tax) Act 1997 (s 4(1)).

• The Radiocommunications Act 1992 for the definitions of spectrum, spectrum licence, transmitter licence and receiver licence (s 4(1)). The Direction instructs ACMA to amend the Determinations that implement taxes under the tax Acts; it does not itself amend the Radiocommunications Act or the tax Acts.

Preservation of ACMA’s statutory powers. The Direction makes explicit that, apart from the directions given in sections 5 and 6, nothing in the Direction is intended to limit or prevent ACMA from exercising its powers under the Radiocommunications tax Acts to vary the amount of those taxes at any other time (s 4(2)). That preserves the underlying statutory framework and ACMA’s discretionary powers under the tax Acts, subject to the express constraints of this Direction for the matters and periods it covers.

Designated Spectrum Licence carve-outs. The Direction’s apportionment of the New EME Component operates only in respect of Designated Spectrum Licences as defined in the Direction (s 4(1) Designated Spectrum Licence). That definition expressly excludes licences issued to Commonwealth Departments of State, certain Executive and Statutory Agencies, licences used only for television outside broadcast services, and licences used only for rail safety/operations/control. The exclusion can interact with obligations or concessions arising under other Commonwealth statutes governing those agencies or services. Because the Direction is specific about which licences are Designated Spectrum Licences, the practical effect is to exclude some public sector and certain service-specific licences from the pool that bears the New EME Component.

Interaction with tax and administrative remedies. The Direction does not create or modify the statutory remedies, enforcement powers or collection rules contained in the Radiocommunications tax Acts. It requires ACMA to change Determinations that feed into those tax collection regimes. Any dispute about a licence holder’s tax liability, or any penalties for non-payment, will therefore be governed by those tax Acts and associated collection rules, not by the Direction itself (s 4(1)).

Temporal interplay. The Direction sets particular timing rules and holding dates that determine which licences are included for the removal or apportionment of EME Components (s 4(1); s 5(3), (6); s 6(4)(a), (5)(a)). Those timing provisions affect how the Direction’s changes intersect with existing billing cycles, licence terms and fiscal year accounting under the Radiocommunications tax Acts.

Label and disclosure obligations relative to other rules. The Direction requires ACMA to discretely label the EME Component within the Spectrum Determination and to do so in a clear and unambiguous way (s 6(4)(b), (5)(b)). That labelling will affect how Spectrum Licence Tax is presented to licence-holders and thus interfaces with transparency and disclosure expectations embedded in administrative law and public accountability practices.

In summary, the Direction is an executive instruction sitting within the existing radiocommunications taxation regime. It does not itself change the tax statutes, but requires ACMA to alter the determinative instruments that produce tax liabilities, and it does so while preserving ACMA’s ongoing statutory powers under the relevant Acts (s 4(2)).

The Direction records its date and commencement and specifies when the amendments it directs must be made and take effect. The instrument itself does not record any prior versions or subsequent amendments within the text provided.

Dates in the Direction. The Direction is dated 15 May 2020 and states that it commences on the day after it is registered (s 2; heading date). It requires ACMA to make certain amendments to the Transmitter Determination and Receiver Determination before 1 July 2020 if amendments are required in accordance with s 5(1) and s 5(4) respectively, and to have those amendments apply to licences held on the relevant Holding Dates (s 5(3), (6)). For the Spectrum Determination, the Direction requires the amendments relating to the first three financial years identified (2020-21, 2021-22, 2022-23) to be made within five months of commencement and to have effect on and from 11 October 2020 (s 6(4)(a)). For the 2023-24 financial year and each subsequent financial year, the Direction requires amendments no later than 20 days before each Spectrum Holding Date for the applicable financial year (s 6(5)(a)). The Spectrum Holding Date is defined as 11 October 2020 and 11 October occurring in each subsequent financial year (s 4(1)).

Caps and escalation mechanics. The Direction sets the combined EME Component caps by year: $2.6 million for each of the three specified early financial years and $1.9 million for 2023-24 and each subsequent year (s 6(1)(a)-(d)). It requires the Combined Spectrum Tax EME Component for 2023-24 and later years to be increased annually by a factor determined by ACMA but not to exceed the Australian Statistician’s published Consumer Price Index factor for June for the applicable year (s 6(2)). Those caps and the escalation factor form part of the operational amendment ACMA must give effect to through the Spectrum Determination.

Reference points for existing instruments. The Direction instructs amendments to the Transmitter, Receiver and Spectrum Determinations “as in force at 30 June 2020” (s 4(1)). That anchors the Direction to the content of those Determinations as they stood at that date, and requires ACMA to change from that baseline.

No recorded subsequent amendments contained in this text. The instrument as provided does not record any amendments to itself or later directions. It establishes deadlines by which ACMA must make changes to the referenced Determinations and sets out the labelling and apportionment requirements. The Direction does not itself amend the Radiocommunications Acts or the Radiocommunications tax Acts; it operates through changes to Determinations made under those Acts (s 4(1)).

Practical consequence of the timing requirements. The Direction’s timing provisions impose short and specific windows in which ACMA must act for certain components (for example, Transmitter/Receiver Determination amendments before 1 July 2020 and Spectrum Determination amendments within five months for the first three years) (s 5(3); s 6(4)(a)). Those timing mechanics are part of the operational amendment history that the Direction itself mandates.

The Direction text contains no record of litigation, challenges, or judicial pronouncements relating to the Direction itself. There are no cases or legal proceedings mentioned in the instrument. The Direction is a ministerial direction to ACMA under s 14 of the ACMA Act (s 3) and does not itself create offences or civil penalty provisions; it instructs ACMA to amend Determinations that determine tax amounts and collection mechanisms under existing Radiocommunications tax Acts (s 4(1)). The Direction therefore sits within a wider regulatory and statutory regime where disputes about tax liabilities or administrative action can be litigated under ordinary administrative law or tax dispute mechanisms; however the Direction itself records no litigation.

Potential grounds and loci of dispute implicit in the instrument. While the Direction contains no litigation history, the instrument creates administrative obligations and allocates discretion in ways that could, in principle, attract legal challenge in the appropriate forum. Those potential areas for dispute, described on the basis of the Direction’s text and not as reported litigation, include:

• Whether ACMA has complied with the duty to remove the Historical EME Component “to the greatest extent practicable” from Transmitter and Receiver Licence Taxes in accordance with s 5(1) and s 5(4), and whether ACMA properly reached and recorded satisfactions under the exceptions in s 5(2) and s 5(5).

• Whether ACMA adopted objective and equitable criteria and properly had regard to the total amount of spectrum each holder may use and any other relevant matters in determining the apportionment of the Combined Spectrum Tax EME Component under s 6(3).

• Whether ACMA made the required Spectrum Determination amendments within the specified timeframes and whether the “EME Component” was discretely designated and labelled in a clear and unambiguous way as required by s 6(4)(b) and s 6(5)(b).

• Whether ACMA’s exercise of other powers under the Radiocommunications tax Acts is consistent with the Direction’s statement that, apart from sections 5 and 6, the Direction is not intended to limit or prevent ACMA from exercising its powers to vary licence taxes at other times (s 4(2)).

Available remedies. The Direction contains no provision setting out remedies for non-compliance by ACMA. Any complaint about ACMA’s compliance with the Direction would proceed in the usual administrative law channels where judicial review is available to challenge unlawful administrative action. Disputes about tax liabilities or the application of tax collection rules would continue to be governed by the remedies and dispute resolution procedures in the Radiocommunications tax Acts and related law. The Direction itself does not create a novel statutory cause of action or an internal dispute procedure.

Absence of recorded litigation. Because the instrument as provided makes no mention of case law or proceedings, this analysis does not assert the existence of any litigation relating to the Direction. Any reference to possible dispute areas above is descriptive of the kinds of legal questions that the Direction’s duties and discretions generate on their face, based on the Direction’s text.

Precise definitions narrow or expand who bears the New EME Component. The Direction’s definition of Designated Spectrum Licence includes spectrum licences issued under Part 3.2 of the Radiocommunications Act 1992, but expressly excludes licences issued to Commonwealth Departments of State, Executive Agencies established under s 65 of the Public Service Act 1999, Statutory Agencies within the meaning of s 7 of that Act, licences conditioned for television outside broadcast use only, and licences conditioned for rail safety/operations/control only (s 4(1) Designated Spectrum Licence). Practitioners and licence-holders should therefore not assume the New EME Component will be allocated across every spectrum licence. The permissible exclusions are explicit and narrow; whether a given licence falls inside the Designated Spectrum Licence definition will depend on how the licence is issued and conditioned.

“To the greatest extent practicable” allocates operational discretion and uncertainty. The Direction requires removal of the Historical EME Component from Transmitter and Receiver Licence Taxes “to the greatest extent practicable” where relevant (s 5(1), (4)). That phrase imports an operational, fact-sensitive judgment for ACMA about how far the Historical EME Component can be removed for particular licences. The Direction adds an exception where ACMA is satisfied the component was never, or has ceased to be, included in a particular licence’s tax (s 5(2), (5)). In practice that might mean some licences retain an Historical EME Component because complete removal would be impracticable for technical, legal or administrative reasons. The Direction does not specify what constitutes “practicable” or set a dispute process if licence-holders disagree with ACMA’s satisfaction.

Different holding dates and effective timing across licence types. The Spectrum Holding Date is a fixed calendar date, 11 October each applicable year, whereas Transmitter and Receiver Holding Dates are defined as any time during the financial year commencing 1 July 2020 and each subsequent financial year (s 4(1)). The Direction requires Transmitter and Receiver Determination amendments to be made before 1 July 2020 and to apply to licences held on the relevant Holding Dates (s 5(3), (6)), whereas the Spectrum Determination amendments for the first three years must be made within five months of commencement and have effect from 11 October 2020 (s 6(4)(a)). Those timing mismatches mean licence-holders could experience changes to transmitter/receiver tax treatment on a different schedule from spectrum taxes, with potential billing and accounting mismatch issues.

Fixed combined caps and CPI cap nuance. The Direction caps the Combined Spectrum Tax EME Component at specified amounts for each financial year: $2.6 million for each of 2020-21, 2021-22 and 2022-23, and $1.9 million for 2023-24 and later years (s 6(1)). For 2023-24 and later years, the Direction allows annual increases set by ACMA but not exceeding the CPI factor published by the Australian Statistician for June (s 6(2)). The capping introduces a single-pool limit on EME funding collected via spectrum licences, but ACMA must calculate apportionments within that cap. The CPI ceiling is asymmetric in that ACMA may choose a smaller factor but cannot exceed the published CPI factor for June. The Direction does not provide a formula for distributing the cap among licence-holders, only criteria that ACMA must have regard to (s 6(3)).

Labelling requirement creates transparency obligation. The Direction requires ACMA to discretely designate and label the component of the Spectrum Licence Tax arising from the Direction as “EME Component” in a clear and unambiguous way (s 6(4)(b), (5)(b)). That is a specific presentation obligation: licence-holders should expect to see a separately labelled line item. Failure to label clearly could give rise to administrative disputes.

Interaction with other ACMA powers. Section 4(2) expressly preserves ACMA’s power to vary licence taxes at other times under the relevant tax Acts, “apart from the directions given in sections 5 and 6.” That means the Direction controls a specified reallocation for the periods and components it specifies, but ACMA can still adjust tax settings more broadly under its statutory powers. Licence-holders should therefore not infer longer-term immunities from future ACMA tax changes.

Anchoring to Determinations as of 30 June 2020. The Direction refers to the Transmitter, Receiver and Spectrum Determinations “as in force at 30 June 2020” (s 4(1)). Practically, ACMA must amend from that baseline. Any change to the Determinations after that date but before ACMA’s amendments are made could complicate the drafting or implementation choices when ACMA proceeds.

No enforcement or dispute mechanism in the Direction. The Direction contains no internal enforcement or appeal mechanism against ACMA’s actions or satisfactions under s 5(2) or s 5(5). If a licence-holder disputes ACMA’s determination of what is “practicable” or ACMA’s apportionment criteria under s 6(3), the dispute resolution pathways will be the standard legal and administrative channels available for challenging administrative acts or contesting tax liabilities under the Radiocommunications tax Acts. The Direction itself does not add a bespoke review or appeal process.

Practical billing complexity. Because the Direction changes which tax instrument bears the EME funding component, there will be billing and accounting adjustments. Transmitter and receiver payers should expect reductions “to the greatest extent practicable” (s 5(1), (4)), and Designated Spectrum licence-holders should expect a discrete EME Component appearing in spectrum tax calculations up to the combined caps (s 6(1), (4)(b)). The timing differences and apportionment criteria create room for disputes about the size and allocation of individual licence-holders’ shares of the Combined Spectrum Tax EME Component.

Licence-holders and advisers. Holders of transmitter, receiver and Designated Spectrum Licences should take the following steps to comply with and prepare for the Direction’s implementation. These steps are grounded in the Direction’s definitions, duties and timing requirements (s 4, s 5, s 6).

1. Identify licence status against the Direction’s definitions. Confirm whether each held licence is a transmitter, receiver or Designated Spectrum Licence as defined (s 4(1) transmitter licence, receiver licence, Designated Spectrum Licence). For spectrum licences, check whether any exclusion applies: Commonwealth Departments of State, Executive Agencies established under s 65 of the Public Service Act 1999, Statutory Agencies within the meaning of s 7 of the Public Service Act 1999, licences constrained to television outside-broadcast use only, or licences constrained to rail safety/operations/control only are not Designated Spectrum Licences (s 4(1) Designated Spectrum Licence). That classification determines whether the licence-holder is exposed to the New EME Component.

2. Determine Holding Date exposure. For transmitter and receiver licences, ascertain whether licences were held at any time during the financial year commencing 1 July 2020 or in subsequent financial years (the Transmitter/Receiver Holding Dates) (s 4(1); s 5(3), (6)). For spectrum licences, check whether licences were held on 11 October 2020 or 11 October in subsequent financial years (Spectrum Holding Date) (s 4(1); s 6(4)(a), (5)(a)). These holding dates determine which licences are in scope for removal or apportionment.

3. Expect labelled changes in Spectrum tax invoices. After ACMA’s amendments, the Spectrum Determination must contain a discretely designated and labelled “EME Component” representing the increase in Spectrum Licence Tax arising from the Direction (s 6(4)(b), (5)(b)). Licence-holders should review ACMA notices and invoices for the separate “EME Component” line and reconcile that amount with the combined cap and apportionment methodology.

4. Review past billing and tax records. For transmitter and receiver licence-holders, review billing history to identify whether a Historical EME Component was included in Transmitter or Receiver Licence Tax charges and whether ACMA’s changes have removed it “to the greatest extent practicable” as directed (s 5(1), (4)). If a Historical EME Component was never included, ACMA’s removal obligation does not apply to that holder (s 5(2), (5)); record-keeping will be important to substantiate claims in any dispute.

5. Monitor ACMA publications for apportionment criteria and determinations. ACMA is required to adopt objective and equitable criteria and to have regard to the total amount of spectrum each holder may use in apportioning the Combined Spectrum Tax EME Component (s 6(3)). Licence-holders should obtain copies of the amended Spectrum Determination and any explanatory material that sets out the apportionment methodology and calculations so they can verify proportional allocations against the published cap amount for the relevant financial year (s 6(1)-(3)).

6. Budget for the New EME Component where applicable. Designated Spectrum licence-holders should incorporate the potential discrete EME Component line item into compliance and budgeting forecasts up to the combined cap for the relevant year (s 6(1)(a)-(d)). Because the Direction caps the total combined amount, each licence-holder’s individual liability will depend on ACMA’s apportionment criteria and the total amount of spectrum they may use (s 6(3)).

7. Track timing obligations and retrospective effect. Note the timing deadlines: Transmitter and Receiver Determination amendments must be made before 1 July 2020 and apply to licences held on the relevant Holding Dates (s 5(3), (6)). The Spectrum Determination amendments for the first three financial years must be made within five months of commencement and take effect on and from 11 October 2020 (s 6(4)(a)). For 2023-24 and later years, amendments must be made no later than 20 days before each Spectrum Holding Date (s 6(5)(a)). Ensure internal accounting teams understand when changes will appear in financial statements and tax ledgers.

8. Prepare documentation and, where necessary, queries for ACMA. If there is a question about whether the Historical EME Component was ever included in a Transmitter or Receiver Licence Tax payable by a holder, maintain documentation that evidences past billing and tax inclusion. If ACMA determines that the Historical EME Component was never included or has ceased to be included for a particular licence, that will affect whether the removal direction applies to that licence (s 5(2), (5)).

9. Engage with advisers for apportionment transparency. Because ACMA must adopt objective and equitable criteria and have regard to the total amount of spectrum each holder may use (s 6(3)), advisers should request the apportionment methodology and supporting data from ACMA to verify allocations. Where necessary, prepare administrative review requests or other lawful challenges under the relevant statutory regimes if disputed results arise; the Direction itself does not set alternative dispute mechanisms.

10. Watch for CPI adjustments from 2023-24. From the 2023-24 financial year, the Combined Spectrum Tax EME Component may be increased annually by a factor determined by ACMA but capped by the Australian Statistician’s published Consumer Price Index factor for June for the applicable year (s 6(2)). Licence-holders should monitor the CPI factor and ACMA notices to anticipate increases.

Administrative compliance for ACMA and collectives. Organisations that administer licence billing should ensure that amended Determinations and their calculation engines reflect the discrete EME Component label and the apportionment criteria (s 6(4)(b), (5)(b), (3)). Ensure billing systems are able to apply the cap across all Designated Spectrum Licences and that the apportionment algorithm has auditable inputs tied to the “total amount of spectrum each holder may use” as required by s 6(3).

In sum, compliance requires accurate classification of licences against the Direction’s definitions, careful attention to holding dates and timing windows, review of past billing to identify Historical EME Components, monitoring ACMA publications for apportionment methodology and amended Determinations, and adjusting budgeting and billing systems to reflect discrete “EME Component” items and capped combined amounts set out by the Direction (s 4, s 5, s 6).