Recent changes to the Australian Telecommunications Act allow for more competition between the NBN and other networks
TPG is looking to expand its network footprint: The Australian operator TPG is pursuing the functional separation of its “superfast carriage” services. These include TPG’s FTTB networks which it currently operates in Sydney, Melbourne, Brisbane, Adelaide, Perth, and other metro areas, and its TransACT network (a local FTTN network acquired in 2015 as part of the merger with iiNet). TPG submitted an undertaking to the Australian Competition and Consumer Commission (ACCC), which opened a consultation last week and is seeking views until 17 December. Should its undertaking be accepted, TPG would have greater flexibility in expanding its network footprint and competing in both retail and wholesale markets. Currently while the retail and wholesale networks are functionally separate, TPG can only expand its network footprint if it operates on a wholesale-only basis.
Australian legislators are removing restrictions on new deployments: Networks that compete with the NBN have faced significant restrictions on how they operate and expand. Until recently, superfast carriage fixed networks had to operate on a wholesale-only basis if they were built or upgraded on or after 1 January 2011. Those built before that date could continue to operate both at the retail and wholesale level, but could not be extended by more than one kilometre from the network footprint as it was on 1 January 2011. These networks are also subject to access regulations. The Government’s Carrier Licence Conditions Declaration of 2014 (CLCs) already requires these operators to structurally or functionally separate their retail and wholesale business units. As a result, TPG has operated on a functionally separate basis, but has faced significant limitations to its network expansion. In May 2020, an amendment to the Telecommunications Act removed the wholesale-only requirement for these networks subject to the ACCC’s acceptance of a new functional separation undertaking. Should the ACCC accept TPG’s undertakings, the operator would be free to operate at the retail and wholesale level.
TPG’s separation request could be approved quickly: The ACCC will now assess the undertakings made by TPG. This could be little more than a formality, since the regulator’s preliminary view is that it will promote the long-term interests of end-users in promoting competition, achieving any-to-any connectivity, and encouraging investment in infrastructure. Importantly, the undertaking would apply to any new infrastructure that TPG deploys. After all, the amendment to the Telecommunications Act seeks to facilitate infrastructure competition perhaps in recognition of the need for a new approach to address some of the shortcomings of the NBN. Operators using the NBN have repeatedly voiced their discontent with regard to aspects such as wholesale pricing and performance. TPG can also rely on an encouraging precedent, since the ACCC agreed to the functional separation of another operator (Uniti Group) in 2020.
