National Broadband Network Discussion Paper

The Australian government released a "National Broadband Network:
Regulatory Reform for 21st Century Broadband" Discussion Paper on 7 April 2009. This 65 page document is perhaps the most significant part of the government's NBN Plan.

The document is provided in PDF (544Kb) and RTF (1.7Mb) formats, with MP3 audio and Braille also offered. Unfortunately a simple HTML version is not offered.

Table of contents and introduction from the National Broadband Network: Regulatory Reform for 21st Century Broadband, Discussion Paper, April 2009:

Table of contents

• Table of contents
• Minister’s foreword
• Australian telecommunications industry snapshot
• Chapter 1: Introduction
• Proposed regulatory reforms for the National Broadband Network roll out
• Consultation on broader regulatory reform options
• Policy goals
• Submission process
• Chapter 2: Regulatory environment for the National Broadband Network and the roll out of fibre
• National Broadband Network governance, ownership and operations
• National Broadband Network access regime
• Facilitation of fibre roll out
• Consultation process
• Chapter 3: Telecommunications competition framework
• Part XIC access arrangements
• Anti competitive conduct provisions
• Separation arrangements for Telstra
• Facilities access regime
• Spectrum allocation
• Chapter 4: Telecommunications consumer safeguard framework
• Universal access
• Connections and fault repair
• Retail price controls
• Community safeguards
• Opportunities for red tape removal
• Enforcement
• Chapter 5: The bigger picture
• Appendix A: Review of operational separation
• Endnotes

Chapter 1: Introduction

The Government has announced an ambitious National Broadband Network initiative to dramatically improve the availability of superfast broadband across Australia. This bold vision will fundamentally change the competitive dynamics of the Australian telecommunications sector. This network will be wholesale only and open access to maximise competition.

However, it will take time for the new network to be built and for the resulting benefits to be realised by Australian consumers and businesses. The Government is therefore reviewing the existing regulatory regime to explore ways that the regime can be made to work more effectively while the National Broadband Network is being built.

The purpose of this paper is twofold:

• to outline the proposed regulatory reforms that the Government will progress to facilitate the roll out of the National Broadband Network, and

• in light of the announcement of the enhanced National Broadband Network, to consult on the options for broader reforms to make the existing regulatory regime more effective in the transition period before the network is fully rolled out.

Proposed regulatory reforms for the National Broadband Network roll out

Legislative amendments that facilitate the roll out of fibre optic to the home and workplace include:

• the operating regime for the National Broadband Network company. The company will be required to be wholesale only and operate on an open access basis. The legislation will also set out the governance arrangements for the National Broadband Network company

• facilitating the physical roll out of fibre optic by:

• expediting land access arrangements for carriers rolling out fibre optic networks to the home and workplace, and

• improving access to poles, ducts and other infrastructure necessary for the roll out of fibre optic networks to the home and workplace, and

• requiring that fibre optic networks be installed in greenfield estates that receive planning approval from 1 July 2010.

Chapter 2 of this paper outlines the approach the Government will take in relation to these issues, as well as the consultative mechanisms that will be put in place. This paper is not intended to provide a forum for discussion on these issues. The Government will consult separately with relevant stakeholders on the detail of these legislative amendments before introducing legislation.

Consultation on broader regulatory reform options

The new network will resolve long standing structural problems that have limited the development of effective competition and investment. However, during the roll out, the existing regime will remain important for promoting outcomes in the interests of consumers and business. There is considerable scope to improve the existing telecommunications regulatory regime to make it work more effectively.

The Government called for submissions last year on regulatory issues associated with the National Broadband Network. In reply, the Government received 82 submissions (the Regulatory Submissions) from a range of stakeholders and across a range of relevant issues. One of the core messages from that consultation was that the current regulatory arrangements have shortcomings and inherent limitations. Many submitters provided detailed suggestions for reform.

Issues around the effectiveness of the current regulatory regime were also raised in:

• submissions on initiatives to provide enhanced broadband to rural and remote areas

• submissions to and the report of the Regional Telecommunications Independent Review Committee (the Glasson Committee) concerning the future needs of rural and regional Australia (the Glasson Submissions and Report), and

• submissions in relation to the Universal Service Obligation Review in late 2007 (the Universal Service Obligation Review Submissions).

In undertaking this review into the existing telecommunications regime, the Government has considered all material received to date and this material has shaped the Government’s views on possible options. Copies of the submissions from previous processes are available on the Department’s website (www.dbcde.gov.au).

The Government has already made a $61.1 million initial response to the Glasson Review. A number of the recommendations from the Glasson Report were to be considered once the outcome of the National Broadband Network process was fully known. Several questions in this discussion paper are relevant to those recommendations, and responses will be taken into account by the Government in its consideration of those recommendations.

A number of questions in this discussion paper relate to the suitability of the present operational separation requirements applying to Telstra. The Government is using this discussion paper to formally commence the review required by section 61A of the Telecommunications Act 1997 (see Appendix A).

Against this background and the announcement of the Government’s National Broadband Network initiative, the Government is now requesting input from interested stakeholders on the regulatory reform options it is considering, as set out in this discussion paper, or other feasible alternatives.

The following chapters are the focus for consultation in this process:

• Chapter 3—opportunities for reform of the telecommunications competition framework, and

• Chapter 4—opportunities for reform of existing consumer safeguards in the telecommunications sector.

Each of these chapters discusses a number of issues, draws on views previously expressed by interested stakeholders, and identifies options for reform that the Government is considering. The Government has not decided to proceed with any particular option at this time. Rather, in light of the enhanced National Broadband Network initiative, the focus of these chapters is to facilitate consultation on the options available to Government.

Chapter 5 flags longer term issues of interest to the Government.

Figure 1 shows the Government’s plan to achieve a highly competitive telecommunications market and national superfast broadband through the transition to the National Broadband Network environment. It will involve improving the effectiveness of the existing telecommunications regime, in addition to requiring legislation for a National Broadband Network company, fibre in greenfield estates and the facilitation of fibre roll outs.

Figure 7: Steps for the transition to the National Broadband Network environment

Policy goals

In considering changes to the existing telecommunications regulatory regime in the transition to the National Broadband Network, the Government will have regard to its ongoing policy commitment to:

• improving productivity across the economy

• competition

• consumer protection

• rural, regional and remote Australia, and

• reducing unnecessary regulation.

The Government also recognises that community safety and national security objectives are integral to its telecommunications policy settings.

Efficient economy and productivity

The overarching objective of the 1997 telecommunications regulatory reforms was to promote the long term interests of end users of telecommunications services, and the efficiency and international competitiveness of the Australian telecommunications industry.¹²

Telecommunications services that are universally available, reliable and affordable are accepted as a critical input to the operation of an equitable society and an efficient economy. While once it was sufficient to have well functioning voice and basic data services, high speed broadband services are essential to the future efficiency and productivity of Australia’s economy. A recent study has suggested that widespread access to and use of high speed broadband would expand economic activity by approximately 1.4 per cent of gross domestic product after five years.¹³

However, these gains will not be achieved unless the correct regulatory settings are in place. In the transition to the National Broadband Network, the Government is committed to creating the market structure that will maximise the benefits to economic efficiency and productivity of high speed broadband services.

Continued commitment to competition policy

The Government’s ongoing commitment is to ensure that markets operate through vigorous competition for the benefit of consumers, businesses and the Australian economy more broadly.¹⁴

The national competition policy reforms agreed to by the Australian and State and Territory Governments in 1995 and 2007 affirmed the importance of effective competition to maintaining and improving the welfare of Australia.¹⁵

The competitive process encourages firms to:

• produce goods and services at least cost

• use resources to produce the goods that are most valued by consumers, and

• innovate by developing new products and services.

The telecommunications competition reforms introduced in 1997 have delivered benefits to date; however, the regime has operated in the context of a highly vertically and horizontally integrated incumbent.

Moving to the National Broadband Network environment will fundamentally change the competitive dynamics in the telecommunications sector. In the meantime, the Government wants to ensure that the existing regulatory regime works more effectively, including by removing incentives for discrimination and delays through regulatory gaming, to increase opportunities for competitive outcomes.

Ongoing commitment to consumer protection

In October 2008, the Council of Australian Governments agreed to a comprehensive consumer policy framework. This included a common objective to improve consumer wellbeing through empowerment and protection, fostering effective competition and enabling confident participation in markets in which both consumers and suppliers trade fairly.

Within the telecommunications sector, the Minister for Broadband, Communications and the Digital Economy has re-affirmed that the Government is committed to ensuring that telecommunications consumers are protected, and to improving the availability, affordability and quality of telecommunications services.¹⁶

Ongoing commitment to regional and remote areas

The Government recognises that appropriate telecommunications services are essential so families, businesses, schools and others in regional and remote areas can actively participate in Australian society.

The Government has recently reiterated its commitment to a prosperous and sustainable regional Australia in its response to the Glasson Review.¹⁷ The Glasson Review was established in legislation. Its role was to assess the adequacy of telecommunications in regional, rural and remote parts of Australia and provide a report to Government, including recommendations. The Government’s response is available at www.dbcde.gov.au.¹⁸

From: National Broadband Network: Regulatory Reform for 21st Century Broadband, Discussion Paper, April 2009.