Australia: Will all retail service providers have equal access rights to the NBN? Not necessarily.

Last Updated: 18 March 2012
Article by Mark Feetham and Luke Standen

On 5 December 2011, NBN Co published its Special Access Undertaking (SAU) and lodged it with the Australian Competition and Consumer Commission (ACCC) for assessment and approval.

The SAU provides a framework under which access seekers are able to gain access to NBN Co's fibre, wireless and satellite networks (NBN Services) for the next 30 years. The SAU interacts with the NBN Co's Wholesale Broadband Agreement (WBA), which is the NBN Co's standard form access agreement published on 30November 2011.

The WBA is not subject to regulatory oversight or approval by the ACCC. It has already been signed by more than 25 telcos including Telstra, Optus, iiNet and Internode. Telcos that have already signed the WBA before approval of the SAU will be able to avail themselves of any benefits they would have received under the SAU through a contractual alignment process provided under the WBA.

Under the NBN Co's proposed access regime, the SAU will provide an overarching framework of both price and non-price terms. But the SAU does not cover all price and non-price terms of access to NBN Services and so is unable to be entered into as a standalone access agreement. Access seekers must first enter into a WBA with NBN Co, which will contain the negotiated commercial terms and run for a much shorter term.

The terms of the WBA and the absence of regulatory oversight over those terms lead to widespread criticism of the WBA upon its publication.

Stakeholder concerns

On 20 December 2011, the ACCC released its first consultation paper on the SAU setting out the legislative and procedural framework for the assessment of the SAU and calling for submissions. The submissions received from telco industry stakeholders in response to the first consultation paper expressed a number of concerns with the SAU.

The major concerns of stakeholders stem from the practical effect of the interaction between the SAU, the WBA and Part XIC of the Competition and Consumer Act 2010 (Cth) on the NBN Co's proposed access framework. In summary, the major concerns are:

  • the ACCC has no real visibility over the commercial terms between NBN Co and its wholesale customers under the WBA
  • to the extent that the WBA deals with a matter, the terms of the WBA prevail over the SAU in relation to that matter, which prevails over ACCC binding rules of conduct, which prevail over ACCC access determinations. Some commentators have suggested that this means if the ACCC does attempt to intervene to regulate terms, then those terms will be overridden by the WBA
  • the SAU can only prevail over the WBA if the WBA allows it to
  • there is limited scope for ACCC involvement in the negotiation of the terms of the WBA between NBN Co and access seekers. Under the SAU there are limited circumstances in which a decision of the ACCC may lead to variation of the terms of the WBA. These provisions allowing recourse to the ACCC only apply:
    • before an access agreement is entered into between NBN Co and an access seeker
    • in respect of non-price terms to the extent they are not covered by the SAU
    • in respect of price-related terms that had not been announced by NBN Co prior to the commencement of the SAU.

If the ACCC accepts the proposed SAU, it will mean all access seekers may not be able to access NBN Services on the same terms. Terms of access will need to be negotiated with NBN Co on a case by case basis and in most cases, the ACCC will not have the power to accept or reject terms of access.

Given NBN Co's statutory monopoly, the concern is that this arrangement is likely to lead to difficult, protracted and expensive access negotiations with NBN Co.

The ACCC consultation and review process

On 10 February 2012, the ACCC released a supplementary consultation paper highlighting what the ACCC considers to be the key issues following the submissions received in response to the first consultation paper and requesting further detail from stakeholders.

Submissions to the ACCC close at 5pm on 30 March 2012. The ACCC has indicated an intention to hold an industry forum to discuss the SAU at some point in April.

The ACCC is required to make a decision on whether or not to accept the SAU within six months, but it has the power to extend that period if it is unable to make a decision within the required period. If the ACCC does not make a decision or extend the timeframe for a decision then it is deemed to have accepted the SAU.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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