On 1 October 2014, the Government released the National Broadband Network Market and Regulation Report (Report). This is the third and final report by the Government appointed Panel of Experts led by Dr Michael Vertigan AC, as part of the independent cost-benefit analysis of broadband and review of the regulatory arrangements for the NBN.

This Report constituted Volume I of the Independent Cost-Benefit Analysis of the NBN. It reviews the overall structure and regulatory framework for Australia's future broadband market, including the role of infrastructure-based competition and, particularly NBN Co's role in that market.

The Panel made 19 recommendations, the key recommendations being:

  • Restructure of NBN Co through the disaggregation of NBN Co into specific technology based entities (such as FTTx, HFC, satellite, transit and fixed wireless networks) and the move to divest of NBN Co’s transit, satellite and fixed wireless business units.
  • Remove NBN Co's obligation to provide fibre to greenfield estates free of charge, on the basis that nothing should prevent a developer from requesting any provider to supply infrastructure in, and to service, their estate.
  • Separation of the ACCC, to transfer its telecommunication-specific functions, (except those related to Part XIB of theCompetition and Consumer Act 2010 (Cth)) to a new networks regulator.
  • Repeal Part 7 of the Telecommunications Act 1997 (Cth) and associated provisions of the Competition and Consumer Act 2010 (Cth).
  • Amend Part 8 of the Telecommunications Act 1997 (Cth), including:
  • the removal of the 1 kilometre exemption and the Ministerial exemption process; and
  • to provide for an undertaking process under which superfast network undertakings are accepted or rejected by the ACCC.
  • Capture in legislation NBN Co’s ongoing service delivery obligations.
  • Adopt a policy of price capping for NBN‐type services, under which prices continue to be affordable but not necessarily uniform nationally and a gradual move towards cost‐based wholesale pricing.
  • Repeal Division 16 of Part XIB of the Competition and Consumer Act 2010 (Cth) (which provides authorisations for NBN Co to conduct activities reasonably necessary to achieve uniform national wholesale pricing that may otherwise be found to be anticompetitive).
  • The ACCC issue guidelines setting out its general approach in dealing with issues relating to new product development by NBN Co, to be reviewed by an independent body.

Do not apply retail price controls to Telstra services on the NBN unless there is clear evidence of consumer detriment due to Telstra facing inadequate actual and potential competition in a particular market segment.

The Government has indicated that it is not likely to adopt some of these recommendations, including those relating to disaggregation and changing the competition rules as these would distract NBN Co as well as create funding issues and uncertainty.

The Government has stated that it intends to release a full response to the Report before the end of 2014.

The Government's media release can be found here. The full report can be found here.