NBN review panel calls for oversight on ACCC decisions

17 Jul 2014

With the National Broadband Network (NBN) review panel chaired by Dr Michael Vertigan having published its first report, it has called for the Australian Competition and Consumer Commission (ACCC) to be subjected to stricter oversight. According to the Australian Financial Review, one of the panel’s initial recommendations is that the regulator’s decisions should be open to review, with it noting: ‘The panel is concerned that the wide-ranging discretions that the regime vests in the ACCC mean that the risks and costs of regulatory error are potentially very high with virtually no checks and balances in place to curb any resulting harms … It is inappropriate and offensive to the norms of good government that regulators should be left to regulate themselves … It is therefore, appropriate that decisions of enduring impact be subject to regulatory oversight, and decisions in relation to access determinations should be subject to merits review.’

Another notable element of this report was the panel’s suggestion that limited pricing discrimination between the prices charged by NBN Co to different retailers could be acceptable. In the report it noted: ‘Non-discrimination requirements should remain in place but should be amended to allow NBN Co to differentiate its service agreements where this provided genuine economic efficiencies or if the ACCC justified it occurring in particular circumstances.’

Plans by alternative operator TPG Telecom to roll out its own fibre infrastructure, meanwhile, could be threatened by proposals to declare ‘vectored VDSL broadband’ services, a move which would force the operator, and others providing similar services, to offer wholesale products to rivals at a regulated price. ‘It would be preferable for service providers to have access to Layer 2 services such as those that are being provided by NBN Co,’ the panel said, adding: ‘In principle, end-users should not be prevented from having a choice of service provider and should not be forced to change service provider (other than in circumstances where a service provider is no longer willing to provide services). Where exclusivity is efficient at the network layer, this should be facilitated so long as end-users retain the ability to choose their service provider.’

With two more reports to be published by the panel, communications minister Malcolm Turnbull has said these will arrive shortly, saying: ‘The panel is continuing with its cost-benefit analysis work and review of broader structural and regulatory issues and is expected to complete these elements over the next few weeks.’