Australia: The Harper Review offers conditional support for access regime but with a new regulator

The National Access Regime in Part IIIA of the Competition and Consumer Act 2010 (CCA) (the Regime) provides a legal framework by which third parties can obtain access to natural monopoly infrastructure in order to compete more effectively in upstream and downstream markets.

The Regime was enacted in 1995 as part of a wave of microeconomic reform and incorporated the recommendations of the Hilmer Report on national competition policy. The future role of the Regime is now being considered by the Harper Review panel (the Panel) despite a recent lengthy and detailed review by the Productivity Commission (PC) 1 .

The government's Terms of Reference asked the Panel to consider whether the Regime was achieving its stated goals. In responding, the Panel's Draft Report focuses on three issues:

  1. whether it is in the public interest to retain the Regime, having regard to its costs and benefits;
  2. whether the PC's recommended amendments to the declaration criteria should be implemented; and
  3. whether there should be broader rights of review of access declarations and arbitrations before the Australian Competition Tribunal (ACT).

It also proposes a significant change to the institutional arrangements for access regulation more generally.

Costs and benefits of the National Access Regime

While the Panel found that the Regime appears to be achieving its original policy goals, it also observed that its role in the regulation of that bottleneck infrastructure is now more limited. The Regime was originally enacted with a focus on introducing competition into electricity, gas, rail, airports, ports and telecommunications industries, all of which tended to be characterised by national monopoly infrastructure.

However, the Panel observed that currently only two services are declared under Part IIIA, the Tasmanian railway network (declared in 2007) and the Goldsworthy iron ore railway in the Pilbara (declared in 2008). It commented that the likely reason was that much of the bottleneck infrastructure in the sectors referred to above was now being regulated by industry-specific access regimes such as the National Electricity Law, the National Gas Law and the telecommunications access regime in Part XIC of the CCA.

While it is true that few services are currently declared, services in industries such as water, airports and rail have been declared in the past. Access disputes have also been notified although, admittedly, there have not been many. What a simple focus on the number of declarations is apt to ignore is the 'incentive' effects of the Regime. It is arguably the threat of more intrusive regulation that has led to settlements and in many cases, voluntary undertakings or facility specific regimes. A recent example is the commercial settlement of a dispute over terminal access between Tiger Airways (a subsidiary of Virgin Australia) and Sydney Airport in the wake of a declaration application by Tiger.

The declaration criteria

The Panel also considered the PC's recommended changes to the declaration criteria. The PC recommended that:

  • the 'uneconomical for anyone to duplicate' criterion (criterion (b)) be amended to expressly incorporate a natural monopoly test i.e. whether the total foreseeable market demand (including demand for the service itself and any substitutes) could be met at least cost by the relevant facility. The PC also recommended that the assessment of costs include an estimate of any production costs incurred by the infrastructure service provider from coordinating multiple users of its facility; or
  • if, contrary to the PC's recommendation, the test were to remain as a 'private profitability' test, criterion (b) should be amended to exclude any consideration of whether the operator of the infrastructure service was able to duplicate the facility.2

The Draft Report expressed support for retaining the 'private profitability' test, which the High Court found to be the proper construction of criterion (b) as currently drafted 3 , but agreed that the test should be amended to clarify that 'anyone' should not include the incumbent facility owner. This appeared to be on the basis that it considered the private profitability test would likely be easier to implement than the 'natural monopoly' test proposed by the PC. However detailed reasons were not given for its view.

The Panel also agreed with the PC's recommendation that criterion (f) be amended to include a positive requirement that access be in the public interest (rather than the existing formulation which simply requires that it not be contrary to the public interest) . As a result, the Panel made the following recommendations:

The declaration criteria in Part IIA should be targeted to ensure that third-party access is only mandated where it is in the public interest. To that end:

  • criterion (a) should require that access on reasonable terms and conditions through declaration promote a material increase in competition in a dependent market;
  • criterion (b) should require that it be uneconomical for anyone (other than the service provider) to develop another facility to provide the service; and
  • criterion (f) should require that access on reasonable terms and conditions through declaration promote the public interest.

Review of access decisions by the Australian Competition Tribunal

Finally, the Panel considered whether there should be broader rights of review of access declarations and concluded that the ACT should have the power to undertake full merits reviews, including hearing directly from employees of the businesses concerned and relevant experts where that would assist. It said however, that 'suitable statutory time limits' should be maintained without explaining how this might occur.

The Panel's recommendations would likely involve a repeal or modification of the current limitations on merits review which were introduced in 2010 to speed up the declaration process. As the High Court observed in Pilbara Infrastructure 4 , these provisions have not yet been tested in practice. Query then whether it is therefore premature to amend them, particularly in circumstances where they were designed to make the process more efficient and user-friendly.

Additionally, as noted below, the Panel has recommended combining the roles of the National Competition Council (NCC) and the ACCC under the Regime in the proposed national access and pricing regulator.

A new regulator for access?

Economic regulation of bottleneck infrastructure is currently undertaken by the ACCC, the NCC and by state and territory regulators.

The ACCC regulates access and pricing of infrastructure services such as telecommunications, energy (through the Australian Energy Regulator (AER) which is a part of the ACCC) and bulk water. It also monitors pricing in other industries. In addition to the ACCC and the AER, Australia has 9 other competitionrelated regulators. The Draft Report commented that "Australia's seven water regulators serve a population 23 million, while, by comparison, the UK's single water regulator (OFWAT) serves more than 60 million people". It also noted concerns that the multiplicity of regulators had resulted in fragmented regulatory oversight and additional costs.

As a result, the Draft Report recommends the creation of a separate national access and pricing regulator to oversee all industries currently regulated by the Commonwealth. Benefits of a single national independent agency are said to include:

  • the ability for the single agency to acquire of a broad range of expertise across a range of industries;
  • a reduction in risk of capture (i.e. the agency losing its independence from the regulated industry);
  • a reduction in regulatory costs due to the removal of multiple regulators and frameworks; and
  • an increase in regulatory consistency.

Unsurprisingly, the ACCC has not been convinced. In the ACCC's initial comments on the Harper Review, ACCC Chairman Rod Sims stated that "the recommendation raises questions about the benefits of having narrowly focussed decision makers, dealing with overlap, as well as the loss of the current synergies and scale economies". 5

If the Panel's recommendation were implemented, the new regulator would assume the following functions currently undertaken by the ACCC and the NCC:

  • the exercise of powers under the Regime (including declarations);
  • functions undertaken by the AER under the National Electricity Law and the National Gas Law;
  • telecommunications access and pricing functions of the ACCC; and
  • price regulation under the Water Act 2007 (Cth).

It remains to be seen whether such a significant reform will gain the necessary political support.


1 See Corrs in Brief Is the Access Regime Worth Keeping? The Productivity Commission says "Yes"(19 February 2014) ( http://www.
2 See Corrs in Brief Is the Access Regime Worth Keeping? The Productivity Commission says "Yes"(19 February 2014) ( http://www.corrs.
3 Pilbara Infrastructure Pty Ltd and Anor v Australian Competition Tribunal and Ors (M155/2011, M156/2011 and M157/2011) [2012] HCA 36
4 Pilbara Infrastructure Pty Ltd and Anor v Australian Competition Tribunal and Ors (M155/2011, M156/2011 and M157/2011) [2012] HCA 36

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.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.