The Federal Government has asked for industry and public submissions on a draft carrier licence condition for networks that supply superfast carriage services to residential customers

After the Australian Competition and Consumer Commission (ACCC) announced on 11 September 2014 that it will not intervene in TPG’s plan to roll out a fibre-to-the-basement (FTTB) network, which would possibly compete with the NBN, the government has announced it will consult on a draft licence condition.

The draft licence condition would require owners of high-speed networks servicing residential customers to functionally separate their wholesale and retail operations, and to provide access to competing service providers on the same non-discriminatory terms as those provided to their own retail operations.

The carrier’s wholesale company would also need to supply a Layer 2 Wholesale Service to other carriers and service providers, with the price of that service set at $27 per month.

The government’s aim is to ensure that carriers provide wholesale access to FTTB network infrastructure and remove the ability to favour their own downstream retail operations over other retailers on the network.

Without such arrangements, competition and consumers can suffer. These are equivalent issues to those addressed by the structural separation of Telstra and NBN Co’s wholesale-only operation.

The government is conscious that the ACCC has announced a declaration inquiry under Part XIC of the Competition and Consumer Act 2010, which is relevant to the issue of access. However, such inquiries take time and cannot provide for functional separation.

The licence condition would remain in place for two years, allowing long-term regulatory arrangements for the sector to be settled.

Therefore, the government has also released a Regulation Impact Statement for Early Assessment, which can be accessed online.

Carriers and other interested parties are invited to provide submissions on the draft carrier licence condition, and can access the draft carrier licence conditions and regulatory impact statement here.

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