Are the Adjudicator’s directions binding?

The Adjudicator’s directions are generally binding and Parties will be able to enforce the Adjudicator’s directions against each other under the terms of the ITA Deed. That is, the ITA Deed provides a contractual remedy in the event that a party does not comply with the process.
However, the Adjudicator’s final determination will not be binding (and may only be appealed) where:

  • There is a manifest error on the face of the document;
  • The final determination is inconsistent with the SSU; or
  • A Wholesale Customer (who is a party to the dispute), within 10 business days after receiving the final determination, gives notices to the Adjudicator and the other parties that it does not wish to be bound by the final determination.

Do any limitations apply to the Adjudicator’s power to make directions?

While the Adjudicator has broad powers to make directions in its final determination, the Adjudicator cannot:

  • Require Telstra to develop or supply a product or service that is not a “Regulated Service”;
  • Require a party to act inconsistently with a legal or regulatory requirement (including the SSU and the Migration Plan);
  • Impose a penalty, an award of compensation or require a party give any other form of financial assistance;
  • Require a party to change its systems or processes in order to compensate for inadequacies in, or consequences caused by, NBN Co’s systems and processes, the process of connecting to the NBN or “Pull Through Activities” under the Migration Plan;
  • Exceed the monetary caps (outlined below);
  • Direct a party to modify its systems or processes other than as outlined below; or
  • Direct Telstra to vary contractual terms, but may require Telstra to offer to vary the non-price terms of its wholesale contracts where this is necessary to achieve a permanent resolution of the dispute.

Monetary Caps

The following monetary caps apply to the Adjudicators powers to make directions:

  • Per event cap: the Adjudicator cannot require a party to incur total costs of more than $1M in relation to the same conduct; and
  • Annual aggregate cap: the Adjudicator cannot require a party to incur total costs of more than $10M in any calendar year.

However, provided the $10M annual aggregate cap is not exceeded, the Adjudicator may exceed the $1M per event cap if it demonstrates in writing that: (1) the relevant requirement is necessary to resolve the causes of the dispute; (2) it will provide an effective resolution; and (3) that it is the least cost resolution and the cost is outweighed by the relative benefits.

The $10M annual aggregate cap applies to directions given by both the ITA Adjudicator and the ACCC as Adjudicator – i.e. there is only one $10M annual aggregate cap, there is not a separate cap for each Adjudicator.

Directions to modify systems or processes

The Adjudicator may also make a direction requiring a party to provide the Adjudicator with a proposal for the modification of that party’s processes or systems to resolve that problem.

Within the time specified in the direction (or if no time is specified, within a reasonable time), the party must provide the Adjudicator with a proposal that complies with the direction.

If the Adjudicator is satisfied with the proposal, the party must implement the proposal in accordance with its terms.

Alternatively, if the Adjudicator is not satisfied, it may then give a direction which prescribes the changes to be made or the particular design features that are required.

Referrals to the ACCC or to the ITA Adjudicator

At any time prior to the Final Determination, the Adjudicator can refer the matter to the ACCC (not in its capacity as Adjudicator) if it thinks the process would be more appropriately dealt with by the ACCC. In this instance, the Adjudicator will immediately close any investigation and notify the parties in writing that it has referred the matter to the ACCC.

Similarly, the ACCC can refer a complaint to the ITA Adjudicator if it thinks the matter should be referred to the Adjudicator.