ACCC & AER annual report 2016-17

Summary of performance

Promoting the economically efficient operation of, use of, and investment in infrastructure; and identifying market failure

Role and functions

As some key infrastructure is provided by only one or a few suppliers, efficient access to that infrastructure may be limited, thereby undermining competition and investment. This matters because appropriate economic regulation and the efficient provision of infrastructure contribute to the efficiency and productivity of the overall economy.

The ACCC is the national regulator of natural monopoly infrastructure facilities in a number of industries. We apply regulation and access conditions to promote effective competition in upstream and downstream markets and deliver benefits in the long-term interests of end users—in effect, of all Australians.

Our role encompasses price regulation, monitoring, and enforcement of industry-specific rules in a number of key infrastructure sectors, including telecommunications, rail, water, ports and airports.

Our objective is to promote the long-term interests of end users through competition and efficient investment in key infrastructure services. To do this we regulate access to bottleneck infrastructure and the pricing for monopoly services. We also monitor and report on the price and quality of goods and services in these monopoly markets and, where relevant, business compliance with industry-specific laws.

In pursuing this objective our key functions include:

  • regulating access to monopoly services that businesses need to compete in upstream or downstream markets
  • regulating access prices where competitive pressures on a supplier are not sufficient to produce efficient prices
  • monitoring and enforcing compliance with industry-specific laws for telecommunications services and rural water services in the Murray-Darling Basin
  • monitoring and reporting on the prices and quality of particular goods and services to inform industry and consumers about the effects of market conditions
  • advocating for competitive, well-functioning markets and efficient regulatory outcomes, including via contributions to law reform and policy processes.

We also review our practices and regulatory frameworks on an ongoing basis to ensure they remain fit for purpose by drawing on internal expertise, consulting with industry and other regulators domestically and internationally, and holding an annual regulatory conference.

We carry out these functions across a range of sectors, including:

  • telecommunications
  • water
  • fuel
  • rail
  • gas
  • bulk wheat export facilities
  • airports
  • container stevedoring
  • postal services.

Deliverables

Our deliverables in this area are:

Deliverable 3.1

Deliver network regulation that promotes competition in the long-term interests of end-users

Deliverable 3.2

Provide industry monitoring reports to government in relation to highly concentrated, newly deregulated or emerging markets

Deliverable 3.3

Improve the efficient operation of markets by enforcing industry-specific competition and market rules

Priorities

Our infrastructure regulation priorities for 2016–17 were:

  • undertaking access, pricing and regulatory coverage assessments across key infrastructure sectors, including rail and telecommunications
  • promoting competition and efficiency in sectors undergoing major reform and/or transitioning to new market structures, including telecommunications and water markets
  • enforcing and promoting compliance with industry-specific compliance regimes in telecommunications and water
  • assessing the implications of emerging competition issues in telecommunications markets
  • advocating for appropriate regulation of monopoly infrastructure, including in areas where there are efficiency concerns independent of competition concerns
  • undertaking price monitoring and reporting activities across different sectors, including petrol, airports, container stevedoring and telecommunications.

Powers

Our powers and responsibilities to regulate infrastructure arise under several different legislative and administrative frameworks. These include:

  • the National Access Regime in Part IIIA of the Competition and Consumer Act 2010 (the Act) (rail)
  • industry-specific access regimes in the Act (communications)
  • price monitoring directions from governments (airports, container stevedoring, petrol)
  • price notification provisions (post, air services)
  • rules and directions made by ministers in markets where competition is newly emerging or may not be working efficiently (rural water, gas, electricity, the northern Australian residential insurance market) or there is a deregulatory agenda (wheat, ports).

Performance indicators

Deliverable 3.1: Deliver network regulation that promotes competition in the long-term interests of end-users

This deliverable is about the ACCC using its regulatory powers to facilitate access to bottleneck infrastructure and competitive pricing for that access.

Table 3.60: Performance indicators for Deliverable 3.1

Performance indicators

Annual target

Result

Number of major regulatory decisions

3

6

Percentage of regulatory decisions completed within statutory timeframes (including ‘stop the clock’ and timeframe extension provisions in the CCA)

100%

100

Deliverable 3.2: Provide industry monitoring reports to government in relation to highly concentrated, newly deregulated or emerging markets

This deliverable is about keeping a close watch on the price and quality of goods and services available in markets that may be inefficient because they are highly concentrated or developing.

Table 3.61: Performance indicators for Deliverable 3.2

Performance indicators

Annual target

Result

Number of annual monitoring reports

4

7

Number of reports on monitoring of unleaded petroleum products

4

7

Deliverable 3.3: Improve the efficient operation of markets by enforcing industryspecific competition and market rules

This deliverable is about the ACCC using its powers to enforce industry-specific rules that promote competitive, efficient markets.

Table 3.62: Performance indicators for Deliverable 3.3

Performance indicators

Annual target

Result

Number of investigations into potential breaches of rules

5

19