Australia - Telecommunications Regulatory and Structural Reform Policy
On 11 December 2014, the Australian Government released a policy paper outlining its plan to implement the National Broadband Network (NBN) and to reform regulation of the telecommunications sector in order to increase competitiveness.
The policy paper came in response to recommendations made in three Vertigan panel reports released in July, August and October 2014 which reviewed regulation in the telecommunications sector and conducted a cost-benefit analysis of the NBN.
The Government has adopted three overarching principles in its new policy: ensuring competition at the retail and infrastructure levels; ensuring the entire telecommunications industry is treated consistently; and ensuring vertical separation of new high-speed broadband access networks.
The Government is set to implement its new regulatory framework in stages to make the regulatory changes as seamless as possible. The initial transition stage will be introduced gradually throughout 2015 and 2016 and will involve, amongst other things:
● a new telecommunications carrier licence condition requiring providers to functionally separate their operations;
● a new wholesale price cap for NBN Co; and
● a separate new developments policy which will take effect from 1 March 2015 requiring developers and owners to meet some of the telecommunications infrastructure costs in new housing developments.
Following the transition period, the new framework is then anticipated to commence on 1 January 2017 and is expected to:
● include measures to promote the structural separation of high-speed fixed line broadband networks that service residential customers whilst also making provision for the Australian Competition and Consumer Commission (ACCC) to enforce the functional separation of such networks. (The policy does not discuss what is meant by "structural" and "functional" separation - arguably, true structural separation can only be achieved where network assets are owned and controlled by a group that does not provide retail services. Functional separation is more likely to be achieved where assets are owned and controlled by separate companies within a group (and subject to certain controls). Due to the common control of the separate companies, this type of separation would amount more to functional separation than true structural separation);
● involve arrangements for the funding of NBN's non-commercial services that are competitively neutral; and
● incorporate legislation that would give priority to all other broadband infrastructure providers over NBN Co.
The policy also includes arrangements for the possible privatisation of NBN Co in the future. Accordingly, the Government's primary aim is to roll out the NBN quickly whilst also improving competitiveness within the telecommunications sector.
For more information, please contact Anne-Marie Allgrove , Toby Patten or Jarrod Bayliss-McCulloch.