Final deemed functional separation undertaking instrument16 Oct 2020

On 16 October 2020, the ACCC issued an instrument known as the Telecommunications (Deemed Functional Separation Undertaking) Determination 2020.

This instrument has been made by the ACCC under subsections 151A(13) and 151B(1) of the Telecommunications Act 1997 (Cth) to reduce the cost burden of functional separation on smaller networks participating in superfast broadband markets. The instrument prescribes a model set of terms for a standard functional separation undertaking that eligible corporations may elect to be bound by. Under subsection 151A(13), the instrument specifies information provided by carriers and carriage service providers to a corporation’s retail business unit that may be disclosed to its wholesale business unit for the purposes of paragraphs 151A(2)(j) and (k) of the Telecommunications Act.

Development and amendment history of the deemed functional separation undertaking

June 2020 consultation paper

On 5 June 2020, the ACCC issued a consultation paper that sought views from stakeholders on the nature and extent of potential functional separation provisions for deemed undertakings and the classes of corporations to which deemed undertakings should apply.

The consultation paper and all public submissions are available on the ACCC’s website at: Consultation - Class exemption instrument and deemed undertakings

August 2020 consultation paper

On 25 August 2020, the ACCC released a subsequent consultation paper addressing feedback on the first consultation paper that also included a draft version of the instrument for comment.

The consultation paper and all public submissions are available on the ACCC’s website at: Consultation - Deemed functional separation undertaking instrument

The instrument incorporates the following suggestions from submissions to the second consultation paper:

  • amending the activities each business unit will undertake such that all network complaints are handled by the wholesale business unit and the retail business unit handles service complaints that don't require any action by the wholesale business unit
  • broadening the scope of corporate service functions that can be performed by shared staff to include marketing and other ancillary services
  • clarifying the definition of Protected Information that cannot be shared between the wholesale and retail business units.

Amendment Determination 2021 (No. 1)

On 3 March 2021, the ACCC issued the Telecommunications (Deemed Functional Separation Undertaking) Amendment Determination 2021 (No.1) to amend the permitted information sharing provisions specified in the deemed functional separation undertaking.

More information about the amendment is available at: Further consultation on permitted information sharing

Amendment Determination 2024 (No. 1)

On 9 November 2023, the ACCC released a consultation paper on proposed amendments to the deemed functional separation undertaking.

The ACCC sought comments from interested stakeholders on the draft Amendment Determination provided at Annexure A to the consultation paper, which included stronger obligations to ensure that an eligible network operator’s wholesale and retail business units are operated on an arm’s-length basis. The draft Amendment Determination also included enhanced transparency and reporting obligations to allow for more effective regulatory oversight by the ACCC.

Submissions closed on Thursday 7 December 2023.

On 5 January 2024, the ACCC issued the Telecommunications (Deemed Functional Separation Undertaking) Amendment Determination 2024 (No.1) to incorporate commitments to enhanced transparency measures and stronger arm’s-length separation between an eligible network operator’s wholesale and retail business units.