The social costs of this option would be reduced were the legacy copper network broadband services kept in service in FTTx deployment areas for so long as the copper was not being used in FTTx deployments, and in HFC areas. This would involve some continuing costs for maintaining the copper, and may not be possible under the disconnection provisions of the Definitive Agreements. Moreover, even were it possible, RSPs using these services would run the risk of the service being terminated, reducing their willingness to invest. This possibility is therefore far from being a complete solution. Retaining the status quo prevent competition developing. This would have implications for the regulatory settings, as the more limited is the extent of competition, the stronger and more intrusive must be the regulatory safeguards. In particular, as set out in the panel’s Statutory Review and in the other chapters of this report, under this option: The ACCC should be more vigilant in administering the panel’s proposed revisions to the anti-discrimination rules; With only narrowly defined exceptions, all of the NBN Co’s services should remain declared services; Competitive neutrality requirements in respect of NBN Co’s decisions about entry and expansion should be given legislative form; Since any subsidies NBN Co might seek could not be market tested there could be no assurance that those subsidies were reasonable. As a consequence no levy-funded subsidy mechanism to support the cost of NBN Co’s universal service obligations should be considered at this stage; and finally, The ACCC should take account of NBN Co’s very substantial and enduring market in considering applications from potential competitors for exemptions from the provisions of Part 8 of the Telecommunications Act. 6.4 Conclusions and recommendations Overall, the panel sees great merit in the commitments successive governments have made to the underlying principles of the Competition Principles Agreement principles the – Commonwealth quite rightly demands that the States and Territories respect. Despite the many complexities involved, there is a significant opportunity to place infrastructure competition on a viable and effective basis. Conversely, should the status quo be entrenched, there is a risk of locking in a structure that will prove as resistant to change as were its predecessors.
The social costs of this option would be reduced were the legacy copper network broadband services kept in service in FTTx deployment areas for so long as the copper was not being used in FTTx deployments, and in HFC areas. This would involve some continuing costs for maintaining the copper, and may not be possible under the disconnection provisions of the Definitive Agreements. Moreover, even were it possible, RSPs using these services would run the risk of the service being terminated, reducing their willingness to invest. This possibility is therefore far from being a complete solution. Retaining the status quo prevent competition developing. This would have implications for the regulatory settings, as the more limited is the extent of competition, the stronger and more intrusive must be the regulatory safeguards. In particular, as set out in the panel’s Statutory Review and in the other chapters of this report, under this option: The ACCC should be more vigilant in administering the panel’s proposed revisions to the anti-discrimination rules; With only narrowly defined exceptions, all of the NBN Co’s services should remain declared services; Competitive neutrality requirements in respect of NBN Co’s decisions about entry and expansion should be given legislative form; Since any subsidies NBN Co might seek could not be market tested there could be no assurance that those subsidies were reasonable. As a consequence no levy-funded subsidy mechanism to support the cost of NBN Co’s universal service obligations should be considered at this stage; and finally, The ACCC should take account of NBN Co’s very substantial and enduring market in considering applications from potential competitors for exemptions from the provisions of Part 8 of the Telecommunications Act. 6.4 Conclusions and recommendations Overall, the panel sees great merit in the commitments successive governments have made to the underlying principles of the Competition Principles Agreement – principles the Commonwealth quite rightly demands that the States and Territories respect. Despite the many complexities involved, there is a significant opportunity to place infrastructure competition on a viable and effective basis. Conversely, should the status quo be entrenched, there is a risk of locking in a structure that will prove as resistant to change as were its predecessors.
NBN-Market-and-Regulatory-Report.docx