Telecommunications reform package enters Parliament

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The Federal Government has introduced into Parliament a telecommunications reform package designed to ensure access to high-speed broadband services throughout Australia, with a focus on rural access.

The Bills push three key outcomes:

  • The Regional Broadband Scheme (RBS) will provide sustainable funding for the loss-making National Broadband Network NBN fixed wireless and satellite networks in regional Australia
  • The creation of ‘Statutory Infrastructure Provider’ (SIP) obligations will ensure that all Australians are able to order a high-speed broadband service regardless of where they live, and that nbn becomes the default SIP as the network is rolled out
  • Reform of the ‘level playing field’ rules will ensure that high-speed broadband network operators have separate wholesale/retail businesses (subject to ACCC oversight), providing competition and choice for consumers, and investment certainty for network builders

The introduction of the package follows extensive policy development and public consultation processes:

  • In 2013-14, a panel of experts chaired by Michael Vertigan undertook a review of telecommunications regulatory arrangements which led to the publication of the NBN Market and Regulation Report and a cost-benefit analysis of the NBN
  • The Government responded in December 2014 in its Telecommunications Regulatory and Structural Reform policy statement
  • The Bureau of Communications and Arts Research undertook detailed analysis and public consultation on funding nbn’ss non-commercial services in regional Australia during 2015 and 2016
  • Exposure drafts of the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2017 and Telecommunications (Regional Broadband Scheme) Charge Bill 2017 were released for public consultation from December 2016 to February 2017

Regional Broadband Scheme (RBS)

nbn’s fixed wireless and satellite networks provide critical broadband services to regional and remote Australia, however these networks are not commercially viable and are expected to incur losses of $9.8 billion over thirty years.

Currently, funding for these networks is dependent on an opaque internal cross-subsidy from nbn’s profitable fixed line networks in metropolitan areas.

The RBS is not a new cost for NBN users – it is already built into existing NBN broadband prices. The RBS simply makes nbn’s internal cross-subsidy transparent instead of opaque, and creates a level playing field by spreading this cost across all NBN-comparable networks.

It is estimated that 95 per cent of the RBS will continue to be paid for by nbn, whereas currently it is 100 per cent. The remaining five per cent will be paid for by competing NBN-comparable wholesale broadband networks.

Statutory Infrastructure Provider (SIP) obligations

The outdated Universal Service Obligation (USO) provides every Australian with access to a voice-only standard telephone service. The new SIP obligations will ensure that every Australian can access high-speed broadband as the NBN is rolled out.

Under the SIP arrangements, nbn will have a legislated obligation to connect premises to its network and supply wholesale high-speed broadband services to retail service providers. The obligations will apply as the NBN becomes ready for service in individual areas, and then across Australia once the NBN is complete.

Other carriers will be able to be SIPs where appropriate (for example, in new developments).

SIPs will have to offer a standard wholesale broadband service supporting peak speeds of at least 25 Mbps download and 5 Mbps upload. These services will also have to support voice calls on fixed line and fixed wireless networks (but not satellite).

The Minister for Communications will be able to set detailed performance requirements, including in relation to reliability and connection/fault repair timeframes.

‘Level playing field’ separation requirements

Changes to separation rules will ensure that superfast broadband networks operate on a level playing field, providing competition and choice for consumers and investment certainty for network builders.

The reforms will allow carriers to operate wholesale and retail businesses on a functionally-separated basis (as opposed to the stronger structurally-separated basis under the current laws), subject to ACCC oversight and approval.

The changes also remove existing separation rules for networks servicing small businesses.

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