ACCC makes telcos open ‘superfast’ broadband networks to competitors

The Australian Competition and Consumer Commission has pushed ahead with opening up so-called ‘superfast’ broadband (25 megabits per second or faster) networks, forcing network operators to allow other telcos to sell services over their infrastructure.

Both TPG’s fibre to the basement (FTTB) network and Telstra's residential fibre networks in South Brisbane are set to be affected by the decision, which has seen the ACCC declare a ‘superfast broadband access service’ (SBAS) for five years.

The move towards declaring the service, which allows the ACCC to set the pricing and other conditions imposed on network access seekers, began in September 2014. The inquiry into declaring the SBAS followed the competition watchdog's decision that TPG's FTTB rollout did not violate anti-cherry-picking rules designed to protect the National Broadband Network rollout.

The ACCC issued a draft decision on the issue in November last year.

The anti-cherry-picking rules are intended to stop telcos building high-speed broadband infrastructure that could undermine the NBN's business case in high-value or low-rollout-cost areas.

Teclos are prohibited from rolling out infrastructure capable of delivering 25Mbps+ download speeds to residential end users unless they offer the service on a wholesale-only basis. However, they are allowed to extend by up to a kilometre networks that existed prior to 2011.

The TPG rollout also caused alarm because of the potential for some blocks of apartments to be limited to one retail supplier of superfast broadband services.

After the ACCC revealed that TPG had not violated the anti-cherry-picking rules, as an interim measure Malcolm Turnbull, at the time the communications minister, introduced a new licence rule for telcos that forced companies to allow competitors to sell services on superfast networks.

The new SBAS rules will not apply to all networks capable of delivering 25Mbps speeds. Exemptions include the NBN and the hybrid fibre-coaxial (HFC) networks that will be incorporated into the NBN, as well as networks subject to the ACC’s Local Bitstream Access Service or Domestic Transmission Capacity. Also exempt are those networks that supply services only to businesses, charities and public sector agencies in CBD areas of capital cities. (The ACCC said this is because competition appears to be effective in those areas.)

“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 chairperson Rod Sims said in a statement.

“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.”

The ACCC will hold another inquiry that will determine the conditions, including pricing, for access to services covered by the SBAS. The regulator has put interim conditions in place until a final decision is made.

Copyright © 2016 IDG Communications, Inc.

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