ACCC issues final decision on regulation of non-NBN high speed internet services

26 May 2017

A final decision on the regulation of high speed internet services supplied over infrastructure other than the National Broadband Network (NBN) has been published by the Australian Competition and Consumer Commission (ACCC).

The ACCC’s ruling sets wholesale prices and other terms and conditions that it claims will ‘provide customers with a larger number of retailers to choose from and deliver them better prices and services’. One notable change from the ACCC’s draft decision means that non-NBN networks will be permitted to pass on the government’s proposed Regional Broadband Scheme (RBS) charge to their customer lines to help fund the supply of non-commercial regional fixed wireless and satellite services by nbn – the infrastructure company overseeing the NBN’s construction. Meanwhile, the ACCC has also confirmed that those firms supplying services to less than 12,000 subscribers will not be regulated under the decision, on the basis that it would apply ‘an unreasonable burden to them with little benefit to customers’. Terms set in the final decision only apply if access providers and access seekers cannot reach their own commercial agreements on prices and other terms for the relevant services.

The internet services subject to the decision are the superfast broadband access service (SBAS) and the Local Bitstream Access Service (LBAS), which the ACCC describes as wholesale ‘superfast’ fixed line broadband services capable of download speeds of 25Mbps or more. As per the final decision the initial prices for providers other than Telstra will be AUD27.0 (USD20.2) per port per month, plus between AUD8.0 and AUD17.5 per month for aggregation to a point of interconnection (POI); the latter charge will vary by retail service provider (RSP) and depend on the average amount of aggregation capacity that it purchases per port. Meanwhile, Telstra’s fibre network prices for 2017/18 are AUD16.0 per port per month (Zone 1) and AUD21.1 per port per month (Zone 2) plus AUD29.3 per Mbps per month for aggregation (i.e. ‘the transport of customer traffic from multiple end users on an aggregated basis’). An RSP will also have to purchase Telstra’s wholesale line rental service, which is an additional AUD20.79 per month. Telstra’s fibre networks are reportedly subject to different pricing arrangements due to the cost of separating these networks from Telstra’s legacy network systems and the prospect that the fibre networks may be transferred to the NBN.

In announcing the decision, the regulator noted that non-NBN infrastructure largely provides service in new housing estates and apartment buildings in central city locations, and in many areas offer connectivity where the NBN does not. Major providers of such services were named as Telstra (South Brisbane and Velocity Estates fibre networks), TPG, Vocus, LBN Co, Opticomm, and OPENetworks. Commenting on the matter, ACCC chairman Rod Sims said: ‘Our view is that the regulated prices based on the NBN prices may not have allowed these network providers to recover their reasonable costs if they were also required to absorb the proposed RBS charge … Consistent with our draft decision, the prices have been set in line with NBN prices and will change with NBN prices over time. Prices will reflect the growth in traffic across the high speed internet sector, which will continue to drive down the average cost of supplying services.’