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The Federal Government has released a framework for regulatory reform in the telecommunications sector, which includes its response to the 53 recommendations made by the Vertigan panel’s NBN Independent Cost‐Benefit Analysis and Review of Regulation.

According to the report, in order to avoid unnecessarily restricting competition the following overarching regulatory policy principles will be adopted:

  • Regulation should allow competition at both the retail and wholesale/infrastructure levels.
  • To the greatest extent possible industry players should be treated consistently under the regulatory framework.
  • New high‐speed broadband access networks (which control ‘last mile’ connections to consumers) should be vertically separated.

For market arrangements to be in accordance with these principles, reform must be implemented gradually, through a transition plan that balances the benefits of the regulatory changes with the potentially adverse impact of some changes on the rollout of the NBN.

Implementation will be achieved through a staged approach whereby:

  • Some changes will be introduced on an interim basis as transitional measures.
  • Others elements will be implemented following the transitional stage, and establish the basis of the longer‐term market model.
  • And a number of remaining issues will be considered around the time that the NBN rollout is completed and privatisation of NBN Co is under consideration.

There are a number of measures that will be implemented in the initial stage of the reform process, several of which are transitional. These measures will progressively take effect over the period between now and the end of 2016.

These measures include:

  • New developments: developers and home‐owners served by NBN Co in new developments will meet some of the costs of this infrastructure upfront to ensure fairer competition in the market, although cost recovery will be capped to ensure these charges do not have a material impact on housing affordability.
  • Carrier licence condition: A new carrier licence condition will come into effect on 1 January 2015 requiring providers of superfast broadband networks providing services to residential customers to be functionally separated and offer a 25/5 Mbps wholesale bitstream service at no more than $27 per month. The carrier licence condition will remain in place for two years as a transitional measure.
  • NBN Co’s wholesale pricing: NBN Co will adopt a wholesale price cap model.
  • Competition regulation: The government will initiate a review of the telecommunications‐specific anticompetitive conduct regime set out in Part XIB of the Competition and Consumer Act 2010 (CCA) in the second half of 2015, and will also bring forward legislation in 2015 to clarify the ACCC’s ability to regulate facilities through Part XIC of the CCA and improve the operation of provisions relating to special access undertakings and fixed principles.
  • Funding for non‐commercial services: The Bureau of Communications Research will undertake an assessment of the costs of NBN Co’s fixed wireless and satellite services, which serve many non‐commercial parts of Australia, and provide options to the government for replacing the current opaque NBN Co cross‐subsidy embedded in its wholesale access prices with more transparent funding arrangements.
  • NBN Co structural options: NBN Co will be required to maintain separate accounts for its satellite, fixed wireless, FTTx, HFC, and transit networks.

The full report can be read online.

In other NBN news, Communications Minister, Malcolm Turnbull, has announced in a blog post that NBN Co is currently working on detailed historical cost per premise numbers, and has reiterated his support for the mixed-technology NBN rollout in response to recent claims that it will be as costly as a full fibre-to-the-premises (FTTP) rollout.

“NBN Co is currently working on detailed historical cost per premise numbers, which will be externally audited and released in due course,” Mr Turnbull said.

 

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