Telecommunications Reform Package
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.
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.
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 will commence on 1 July 2020.
Regional Broadband Scheme
The Government is establishing 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. By the time the NBN is completed in 2020, 95% of the RBS will continue to be paid for by NBN Co, whereas today it is 100%. The remaining 5% 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.
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.
We consulted on the Telecommunications Reform Package between December 2016 and February 2017.
Where to from here?
The Government originally introduced the legislation on 22 June 2017. The Government re-introduced the legislation with a number of amendments on 28 November 2019. The new arrangements for networks servicing small businesses and the arrangements for networks to have wholesale and retail businesses will start three months after the Act receives Royal Assent. The SIP arrangements will commence on 1 July 2020. The RBS will begin accruing from 1 July following passage of the legislation.
Response to the Senate Committee's report on the Telecommunications Reform Package Bills
The Australian Government responded to the Senate Environment and Communications Legislation Committee report on the previous version of the Telecommunications Reform Package Bills on 25 January 2018. The Government supports the recommendations of the Senate Committee's Majority Report.
The Government will be consulting stakeholders closely on the implementation of the arrangements.