Superfast broadband network class exemption & deemed functional separation undertaking

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The Telecommunications Legislation Amendment (Competition and Consumer) Act 2020 (TLA Act) received Royal Assent on 25 May 2020. Among other provisions, it amends the Telecommunications Act 1997 (Cth) (Telecommunications Act) to enable superfast fixed line broadband networks serving residential customers to operate on a functionally separated basis (rather than a structurally separated basis).

In particular, the TLA Act inserts a process into Part 8 of the Telecommunications Act, under which network operators will be able to voluntarily submit functional separation undertakings to the ACCC for approval. This is intended to provide greater commercial flexibility for superfast network operators and promote infrastructure-based competition.

In addition, the ACCC is empowered to determine a deemed functional separation undertaking that an eligible corporation can choose to be bound by instead of submitting its own customised voluntary undertaking.

The ACCC may also make determinations exempting small network operators from the requirement to operate on a wholesale-only basis. However, any such exemption does not remove the requirement for these operators to offer access to a wholesale service on non-discriminatory terms.

These new laws take effect on 25 August 2020, which is the day after the end of the period of three months beginning on the date the TLA Act received Royal Assent.

On 5 June 2020 the ACCC issued a consultation paper on the draft class exemption instrument (including a draft instrument) and the issues relevant to the making of deemed undertakings for stakeholder feedback. Submissions closed Friday 17 July 2020.

On 25 August 2020, the ACCC issued a consultation paper seeking stakeholder views on a draft deemed functional separation undertaking instrument including the proposed class of corporations to which it should apply. Submissions are due by COB, Tuesday 15 September 2020.

The ACCC also issued a final class exemption instrument and accompanying explanatory statement on 25 August 2020.

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