The Australian Competition and Consumer Commission has released its draft decision for the declared superfast broadband access service (SBAS) and the local bitstream access service (LBAS). The draft determination outlines the prices retail service providers will pay, in the absence of a commercial agreement, to acquire NBN-like fixed line superfast broadband wholesale services on non-NBN networks.
“A key objective has been to ensure that retail service providers and customers supplied via SBAS and LBAS networks would not be any worse off than if they were supplied by the NBN,” ACCC Chairman Rod Sims said.
“The draft prices have been set in line with NBN prices and will change with NBN prices over time. Prices will reflect the growth in traffic across the superfast broadband sector, which will continue to drive down the average cost of wholesale aggregation services.”
“We expect that these wholesale price changes will likely lead to lower prices for retail customers of superfast broadband providers,” Mr Sims said.
The major SBAS and LBAS networks expected to be subject to the Final Access Determinations include those operated by Telstra (South Brisbane and Velocity Estates networks), TPG, Vocus, LBN Co, Opticomm, and OPENetworks.
The ACCC has been mindful of the regulatory burden our decisions can place on small providers. The draft decision proposes to exempt those SBAS providers supplying less than 12,000 end users (down from 20,000 in the SBAS interim access determination). This is on the basis of technical advice that the compliance costs for these operators are expected to be high, relative to the expected wholesale revenues and the likely benefits to end users.
The ACCC has also provided for prices to incorporate the Government’s proposed industry levy on superfast local access lines to help fund NBN Co’s supply of non-commercial regional fixed wireless and satellite services.
Submissions on the draft decision are open until 17 February 2017 and a final decision is expected by June 2017.
The draft decision report and draft FADs are available at: Combined SBAS/LBAS FAD inquiry draft decision
Notes to editors
Under the draft decision, the initial prices for providers other than Telstra will be $27.00 per port per month plus $15.25 per Mbps per month for aggregation. The aggregation price is $2.25 less than its existing regulated level. The regulated aggregation charge will also apply to the LBAS.
Different prices apply for Telstra’s fibre access broadband (FAB) services supplied in South Brisbane and its Velocity Estates. This is because these networks were built to work with Telstra’s legacy copper-based systems and because they are expected to move to the NBN within the next few years.
The draft Telstra FAB prices are similar to those prices set in line with the NBN and will initially be $23.45 per port per month (Zone 1) and $28.46 per port per month (Zone 2) and $16.65 per Mbps per month for aggregation. These changes bring a significant reduction in the aggregation charge – by $12.62 per Mbps per month from current levels.
The ACCC declared the SBAS and LBAS services in July 2016 and October 2012, respectively. Once a service is declared, a network owner must provide access to the service upon request, and where commercial agreement cannot be reached, prices in an access determination can apply. Declaration ensures all service providers have access to the infrastructure they need to supply competitive communications services to end-users.
The LBAS is a wholesale access service for fixed line networks that are built or upgraded after January 2011. The LBAS is a ‘last mile’ fixed line service provided to residences and small business where the download transmission rate is superfast (25 megabits per second (Mbps) or faster).
The SBAS covers remaining eligible fixed line networks, including those built before 1 January 2011 other than services supplied exclusively to business customers, public bodies or charity customers within the CBDs of the capital cities.
Other technologies capable of supplying superfast broadband services (defined as services capable of download speeds of at least 25 Mbps) that are not covered by the SBAS and LBAS declarations are fixed wireless, satellite, and mobile.
An interim access determination (IAD) currently applies to the SBAS and an existing FAD applies to the LBAS.
The ACCC released a discussion paper in September 2016 inviting submissions on the price and other terms and conditions for FADs for the SBAS and the LBAS.
Terms set in access determinations only apply if access providers and access seekers cannot reach their own commercial agreements on prices for the relevant services.
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