The Australian Government is reforming the telecommunications market to promote competition and to improve access to broadband services for all people in Australia, especially those living in regional, rural and remote areas.
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The Telecommunications Reform Package will promote competition and improve access to broadband services for all people in Australia, especially those living in regional, rural and remote areas. The Government has a long-standing commitment to these reforms.
Important update for telecommunications carriers—June 2020
The Telecommunications Reform Package has three main elements:
- The Statutory Infrastructure Provider regime
- The Regional Broadband Scheme
- Reforms to carrier separation arrangements.
The Package passed the Parliament on 14 May 2020 and received Royal Assent on 25 May 2020.
The Telecommunications Legislation Amendment (Competition and Consumer) Act 2020 and Telecommunications (Regional Broadband Scheme) Charge Act 2020 came into force on 26 May 2020.
This legislation introduces new obligations on telecommunications carriers.
The Statutory Infrastructure Provider (SIP) regime commenced on 1 July 2020.
- The SIP regime will be part of a new Universal Service Guarantee (USG) covering broadband as well as voice.
- From that date, NBN Co will be the SIP for areas it has declared ready for service. Other carriers will be the SIPs for new developments where they have a contract to install telecommunications infrastructure, and complete construction after 1 July 2020.
- The Minister can 'designate' some SIPs and SIP areas (for example, where a superfast network was already in place prior to the legislation commencing). A designation instrument is being developed. Carriers servicing existing developments and needing to be designated can contact the USG Team in the Department at email@example.com to assist with this work.
- Further information is below under 1—Statutory Infrastructure Providers.
The Regional Broadband Scheme (RBS) commences on 1 January 2021.
- Carriers are required to report the number of potentially chargeable premises on their networks and their reportable associations to the Australian Competition and Consumer Commission (ACCC) within 60 days after the Royal Assent. The ACCC will provide advice to carriers about the form of the report and reporting timeframes.
- The RBS charge is collected one financial year in arrears. The first eligible financial year runs from 1 January to 30 June 2021. Carriers will be required to maintain a record of their chargeable premises and reportable associations each month, starting from 1 January 2021. Carriers should begin preparing to implement the Scheme.
- Starting in October 2021, carriers will report their chargeable premises and associations for the previous financial year to the Australian Communications and Media Authority (ACMA) in October each year. The ACMA will assess carriers' charge liability and invoice them in November each year. Carriers will pay their charge liability in December each year into a Special Account established by the legislation. The ACMA will provide further advice to carriers about their obligations under the RBS.
- Further information is below under 2—Regional Broadband Scheme
The reforms to the carrier separation arrangements commenced on 25 August 2020, three months after Royal Assent.
- Amendments to the carrier separation rules commenced on 25 August 2020. These amendments include the provision of ACCC powers to approve functional separation undertakings for controllers of lines providing superfast fixed-line services, and amendments to the exemptions from the wholesale-only requirements for suppliers of such services.
- The obligation for carriers to provide a layer 2 bitstream in accordance with Part 7 of the Telecommunications Act 1997 and the associated provisions of the Competition and Consumer Act 2010 have been repealed, effective 26 May 2020.
- Carriers should note that they may still be required to provide wholesale layer 2 bitstream services in accordance with the ACCC Layer 2 bitstream Service Declaration and the Superfast Broadband Access Service declaration.
- Further information is below under 3—New wholesale and retail rules to encourage competition
1. Statutory Infrastructure Providers
The Government is committed to ensuring people in Australia have access to reliable high speed broadband, regardless of where they live.
The Statutory Infrastructure Provider (SIP) obligations ensure that all Australian premises are able to access superfast broadband services (25 Megabits per second (Mbps) or better). There will be a requirement on NBN Co Limited (NBN Co) to connect premises and supply wholesale broadband services on reasonable request. NBN Co will become the SIP for areas as it rolls out its network and it will be the default SIP for all of Australia after the NBN is declared built and fully operational.
Other network providers can also be SIPs where appropriate. For example, where they have contracts to service premises in a new real estate development.
While SIPs will be able to offer a range of products, they will be required to offer a standard broadband service with peak speeds of at least 25 Mbps download and 5 Mbps upload. On fixed-line and fixed wireless networks, SIPs' standard services will also be required to support voice services for consumers.
The Minister for Communications will be able to make standards, rules and benchmarks that could set out more detailed requirements, such as timeframes for providing access and rectifying faults. SIPs will be required to comply with these standards, rules and benchmarks.
The Australian Communications and Media Authority will monitor and enforce the SIP arrangements. It will also maintain a public register of SIP areas and SIPs.
The SIP arrangements commenced on 1 July 2020.
2. Regional Broadband Scheme
The Government has established a Regional Broadband Scheme (RBS) to ensure transparent and sustainable funding for essential broadband services in regional, rural and remote Australia.
NBN Co's fixed wireless and satellite networks provide broadband access to around one million homes and businesses across regional Australia. However, these networks are very expensive and are estimated to incur net losses of $9.8 billion over 30 years. Currently these losses are funded by an opaque internal cross-subsidy from NBN Co's profitable fixed-line networks.
The RBS makes this cross-subsidy transparent and requires other competing fixed-line networks to contribute to the cost of funding broadband in regional Australia.
The RBS does not impose a new cost on NBN users—the cost is already built into existing NBN pricing. After the RBS commences, around 95 per cent of the cost of funding NBN Co's fixed wireless and satellite networks will continue to be paid for by NBN Co, whereas today it is 100 per cent. The remaining five per cent will be paid for by competing NBN-comparable wholesale networks. This establishes a competitively-neutral funding mechanism for broadband services in regional and remote Australia.
The RBS is a long-term solution that ensures essential broadband services will continue to be provided in regional Australia well into the future, regardless of who owns the regional networks and who is the dominant fixed-line provider in profitable metropolitan areas.
3. New wholesale and retail rules to encourage competition
The changes to separation rules (requirements for network owners to have separate wholesale/retail businesses) ensure that all new superfast broadband networks operate on a level playing field, providing competition and choice for consumers and investment certainty for network builders.
Since 1 January 2011, new high speed broadband networks have been required to be wholesale-only. The Government is amending these rules to make them clearer and more effective, and allow network providers to run separate wholesale and retail businesses on a 'functionally separated' basis. This will create new commercial opportunities for providers and encourage them to invest and compete to offer better services for consumers. Network providers will need to obtain the approval of the Australian Competition and Consumer Commission (ACCC) by submitting a functional separation undertaking. The ACCC will consider undertakings based on whether they promote the long-term public interest.
The reform package will also remove rules that required networks servicing small businesses to be wholesale-only. Small businesses will benefit because competition will promote investment in networks and services to meet their specific needs.
The ACCC will also be able to exempt very small operators from the rules. This is expected to encourage new entrants into the market.
The Department consulted on the Telecommunications Reform Package between December 2016 and February 2017.
Responses to the Senate Committee's report on the Telecommunications Reform Package Bills
The Government originally introduced the legislation on 22 June 2017. The Australian Government responded to the Senate Environment and Communications Legislation Committee report on that version of the Telecommunications Reform Package Bills on 25 January 2018. The Government supported the recommendations of the Senate Committee's Majority Report.
The Government re-introduced the legislation with a number of amendments on 28 November 2019. The Australian Government responded to the Senate Environment and Communications Legislation Committee report on the current version of the Telecommunications Reform Package Bills on 14 May 2020 during the second reading debate in the Senate. The Government supports the recommendations of the Senate Committee's Majority Report.
The Government is consulting closely with stakeholders on the implementation of the arrangements.