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ACCC to regulate super-fast broadband for next five years

Fibre and cable-based non-NBN wholesale broadband services with speeds of more than 25Mbps are to be regulated for the next five years by the ACCC.
Written by Corinne Reichert, Contributor

The Australian Competition and Consumer Commission (ACCC) has announced its decision to regulate wholesale super-fast broadband service (SBAS) access for the next five years, declaring all pre-2011 non-National Broadband Network (NBN) fibre access networks with speeds of more than 25Mbps.

"The Australian Competition and Consumer Commission has concluded its public inquiry, and has declared a super-fast broadband access service on all non-NBN pre-2011 super-fast broadband networks," the ACCC said in its Superfast Broadband Access Service declaration inquiry Final decision [PDF].

"The declared service is: A Layer 2 fixed-line broadband service with a download data rate that is normally more than 25 megabits per second; or a fibre access broadband (FAB) service, such as that already supplied by Telstra on its fibre networks in the South Brisbane and Velocity estates."

SBAS services include fibre-to-the-premises (FttP), fibre-to-the-node (FttN), fibre-to-the-basement (FttB), fibre-to-the-distribution-point (FttDP), and hybrid fibre-coaxial (HFC) networks, with the ACCC excluding satellite, fixed-wireless, and mobile broadband services from the declaration.

The ACCC made the inquiry in response to concerns raised by the Vertigan Review that there was the possibility of smaller monopolies and a lack of competition occurring outside of the federal government's NBN to provide access to high-speed broadband networks.

"This is an acknowledgment that all super-fast broadband networks, regardless of their size, display natural monopoly characteristics. What this access declaration does is provide retailers with the opportunity to enter super-fast broadband markets, and in turn increase competition," ACCC Chairman Rod Sims said on Friday.

"This decision will also help to simplify and clarify the existing regulations that apply to super-fast 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."

Under the decision, the ACCC has set interim price and non-price terms and conditions that are applicable for the next 12 months while it conducts an inquiry into these. The pricing was based on similar super-fast broadband services.

The interim pricing sees Telstra FAB zone 1 services charged at AU$22.14 per port per month for end-user access, and an aggregation charge of AU$29.27 per Mbps per month; Telstra FAB zone 2 and 3 services have a port or end-user access charge of AU$26.87 per port per month, and an aggregation charge of AU$29.27 per Mbps per month; and other non-Telstra, non-FAB SBAS services have a port or end-user access charge of AU$27 per port per month, and an aggregation charge of AU$17.50 per Mbps per month.

The ACCC will also consider compliance costs over the next 12 months, although SBAS operators with fewer than 20,000 customers are exempted from the regulatory burden, as have the TPG-owned TransACT/iiNet VDSL network and the HFC network in regional Victoria. HFC networks that are due to be transitioned over to NBN's ownership are also excluded from the declaration

"On balance, the ACCC's final decision is that superfast broadband networks, irrespective of their geographic footprint and subscriber base, display characteristics of natural monopolies, due to both technical and economic barriers to entry, and declaring an SBAS will promote the LTIE [long-term interests of end users]," the regulator concluded.

"In most areas where these services are supplied there is limited, if any, infrastructure competition which supports this conclusion."

The ACCC earlier this month also commenced an inquiry into whether wholesale ADSL internet services should continue being regulated in the face of the NBN rollout, the use of mobile data, and the higher volumes of data being downloaded.

According to the ACCC, ADSL services are still the dominant broadband technology in use within Australia for fixed-line services, but technological progress -- such as super-fast broadband being provided on fibre and HFC NBN networks -- needs to be taken into consideration.

"A number of changes have occurred since the wholesale ADSL service was first declared in 2012, including the progressive rollout of the National Broadband Network," ACCC Commissioner Roger Featherston said.

"This inquiry will assist the ACCC in determining whether continued declaration of the wholesale ADSL service is in the long-term interests of end users."

In making a decision on whether to extend, revoke, or vary the declaration of wholesale ADSL services, the ACCC must take into account telecommunications services competition, the availability of any-to-any connectivity, and promoting economical use of and investment in telecommunications infrastructure.

Taking these and the changes in the market into account, the ACCC noted that ADSL services are "likely" to attract regulation into the future, as mobile services are used to complement rather than replace fixed-line broadband.

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