Superfast broadband networks opened up to competition through ACCC declaration

The Australian Competition and Consumer Commission has decided to regulate access to wholesale superfast broadband services and today declared a five-year ‘superfast broadband access service’ (SBAS).

The SBAS declaration allows retailers to access non-NBN network services with a downstream data rate normally more than 25 Mbps. This includes the fibre-to-the-basement (FTTB) network operated by TPG subsidiary AAPT, and Telstra’s fibre networks in South Brisbane and Velocity estates.

“This is an acknowledgment that all superfast broadband networks, regardless of their size display natural monopoly characteristics. What this access declaration does is provide retailers with the opportunity to enter superfast broadband markets, and in turn increase competition,” ACCC Chairman Rod Sims said.

“This decision will also help to simplify and clarify the existing regulations that apply to superfast broadband services, allowing all retail providers to compete on their relative merits, regardless of the technology used, when the network was constructed, or who operates it.”

“Importantly, this will benefit consumers in the long term because it means greater competition between retail providers, and more choice, can now occur,” Mr Sims said.

The announcement of the SBAS declaration of service has triggered a public inquiry into the price and non-price terms of access that should apply to the SBAS. The ACCC has set interim price and non-price terms and conditions to apply for the next 12 months while it completes this inquiry.

Interim prices for entry level services are benchmarked to existing regulated prices for similar superfast broadband services on the NBN and other networks.

In setting interim terms and conditions the ACCC has had regard to concerns about the regulatory burden for smaller providers and exempted those superfast broadband operators supplying less than 20 000 customers. During the inquiry the ACCC will look closely at the likely compliance costs for these operators, being mindful of the price benefits competition can bring to consumers.

The TransACT/iiNet VDSL network and the HFC network in regional Victoria (all owned by TPG) will also be exempt in the interim, to allow sufficient time for these networks to be reconfigured to supply an SBAS product.

Background

The ACCC can declare a service if it is satisfied that doing so would promote the long-term interests of end users. Once a service is declared, a network owner must provide access to the service upon request and where commercial agreement cannot be reached, the ACCC must determine regulated price and non-price terms. Declaration ensures all service providers have access to the infrastructure they need to supply competitive communications services to end-users.

The SBAS applies to all Layer 2 superfast broadband services except those supplied on the NBN, HFC networks contracted to be transferred to NBN Co, networks already subject to the LBAS or Domestic Transmission Capacity (DTCS) declarations and those that exclusively supply business, charity and public body end-users in central business district (CBD) areas of capital cities (where competition appears to be effective).

The ACCC has adjusted the SBAS final declaration to make clear that while Telstra must provide access to services on its fibre networks in South Brisbane and Velocity estates it need not undertake any network/systems changes to do so, given these networks will ultimately be transferred to NBN.

The interim prices are set out in Table 1 for the SBAS . They are for 12 months while the ACCC conducts its inquiry.

Additional information is available at Superfast broadband access service declaration inquiry.