Posted on December 10, 2020 by Liam Mulligan and Sue Puckeridge 10

UPDATE – Telstra Payphone Cabinets NOT ‘low-impact facilities’

In April 2020, we blogged on a decision of a judge of the Federal Court which held that Telstra Corporation did not require development consent (or planning permission under the town planning laws of other states) to install about 1,800 new payphone cabinets around Australia (‘New Payphone Cabinets‘). These “smart payphone cabinets” were to include an electronic LCD screen at the rear, on which digital advertising content was to be provided by a third-party commercial partner of Telstra.

The Court had reached this view on the basis that the New Payphone Cabinets were “low-impact facilities” within the meaning of Schedule 3 of the Telecommunications (Low-Impact Facilities) Determination 2018 (Cth) (‘Determination‘).

The Full Federal Court has now reversed that earlier decision.

In doing so, the Full Court held that the New Payphone Cabinets are not low impact facilities.  Accordingly, Telstra is not able to rely on the Determination to avoid the requirement to obtain planning permission under the relevant local law for the installation of the New Payphone Cabinets.

The majority did not accept the primary judge’s characterisation of the use of the New Payphone Cabinets as a future, conditional intention to display commercial advertising because the commercial arrangements between Telstra and AdBooth demonstrated that the intended use was to display commercial advertising.

Critically, it did not accept that Item 6-1 of the Determination was satisfied.  Item 6-1 provides that a ‘public payphone cabinet or booth’ or a ‘public payphone instrument‘ is a ‘low-impact facility’ if the facility is:

1. used solely for carriage and content services; and
2. not designed for other uses (for example, as a vending machine); and
3. not fitted with devices or facilities for other uses; and
4. not used to display commercial advertising other than advertising related to the supply of standard telephone services (or displayed as part of the supply of a content service in the case of a public payphone instrument).

The majority of the Court noted that for a public payphone to be a low impact facility, (a) – (d) must all be satisfied. The New Payphone Cabinets did not satisfy condition (d) of Item 6-1 as one of the functions which the proposed cabinets were designed to serve was the display of commercial advertising, other than advertising related to the supply of standard telephone services.

In support of this conclusion, the Court noted that:

1. the New Payphone Cabinets were designed and would be installed pursuant to a commercial agreement (‘Advertising Program Agreement‘) between Telstra and AdBooth pursuant to which the New Payphone Cabinets were intended to provide both telecommunication services and commercial advertising;
2. under the Advertising Program Agreement AdBooth was to design the cabinets with a large screen on the reverse side, facing away from the user. The cabinets are therefore designed specifically for the purposes of advertising;
3. pursuant to the Advertising Program Agreement, Adbooth was to obtain planning approval for the display of advertising on each cabinet before Telstra would exercise its powers under Telecommunications Act 1997 to install each cabinet; and
4. there was no evidence to suggest that Telstra would proceed to install any cabinet if planning approval for the display of advertising had not been obtained.

For that reason O’Bryan J (the author of the majority’s reasons) concluded (at [169]) that ‘the evidence adduced at trial requires a conclusion that the proposed New Payphone Cabinets are not low-impact facilities because the function they are designed to service is the display of commercial advertising. As stated earlier, Item 6-1 of the Determination must be construed in a practical manner and, by the same reasoning, must be applied in a practical manner. It can be accepted that a future use of the proposed New Payphone Cabinets to display commercial advertising that is remote or speculative would not satisfy condition (d). However, in this case, commercial advertising is not remote or speculative. Such use is one of the central functions that the New Payphone Cabinets is designed to serve‘.

Implications

The decision is, in our view, an important one as it overturns a decision which would have had significant consequences for the regulation of the display of advertising in public places across the country.

In NSW the display of commercial advertising is dealt with in State Environmental Planning Policy No 64—Advertising and Signage (‘SEPP 64‘). As we previously noted, the majority of the SEPP 64 criteria are focused on the impacts of the advertising structure, rather than the advertising itself.  Accordingly, where advertising was permissible under SEPP  64, there would have been little Council could do to regulate the display of commercial advertising on the New Payphone Cabinets, if the original Federal Court decision had not been overturned.

You can read our previous blog here and the Full Federal Court’s decision here.