Turnbull seeks wholesale access from all FTTB carriers

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Turnbull seeks wholesale access from all FTTB carriers
Communications Minister Malcolm Turnbull.

Looks to contain telco market ‘instability’ caused by ACCC ruling.

Communications Minister Malcolm Turnbull has this morning announced that he will begin talks with Australia's telcos on the possibility of a new telecommunications licence condition that would require all high-speed fibre-to-the-basement carriers to offer wholesale access to their networks.

The move came just minutes after the Australian Competition and Consumer Commission (ACCC) announced it has granted TPG the green light to continue with its FTTB rollout in Australian capital cities, which it ruled was not in breach of NBN anti-cherry picking provisions.

The provisions were added to the Telecommunications Act in 2011 to protect the nation-wide NBN rollout from private operators who might seek to pick off low-cost, high-yield areas for high-speed broadband connections before the NBN was connected.

The ACCC has confirmed that the TPG play falls within the so called ‘loopholes’ in the cherry-picking conditions - loopholes that protect fibre laid before 1 January 2011 and extensions that don’t exceed one kilometre.

Unsurprisingly, TPG has welcomed the decision.

However, the consumer watchdog made it clear that it was not happy to leave the matter there, stating that it would probe further into the issue of NBN competition via a ‘declaration inquiry’.

The regulator said the inquiry would investigate “whether a superfast broadband access service like the type to be provided by TPG over its fibre-to-the-basement networks should be the subject of access regulation,” explained ACCC chairman Rod Sims.

But the Communications Minister has stepped in quickly to hose down the prospect of a lengthy ACCC review.

“The public inquiry process for declaring a category of telecommunications services can take up to a year, however, which creates a window of potential instability and industry uncertainty," Turnbull said in a hastily released statement.

“I am therefore proposing to consult industry in coming weeks on a new telecommunications licence condition, which will apply to all carriers."

The Government has to consult with carriers for a minimum of 30 days before making a change to the telecommunications licencing conditions.

If the planned amendments go ahead, carriers will be welcomed into the FTTB market, but with strict new conditions imposed that will force them to open the connections to wholesale access and functionally separate out those wholesale operations from regular carriage operations.

Wholesale prices charged for carriage over those FTTB connections will also be subject to ACCC regulation.

“This licence condition would remain in place for two years – allowing the ACCC to undertake its declaration inquiry, the recommendations of the Vertigan panel to be properly considered, and long-term regulatory arrangements for the sector to be settled,” Turnbull said.

He also welcomed the prospect of a new level of competition to the FTTB market, which Telstra is also known to be looking into, saying the move will “ensure that residents of multi-tenant buildings connected by vertically integrated carriers such as TPG can choose services from providers such as Optus, iiNet or Telstra if they wish."

Steve Dalby, chief regulatory officer at iiNet told iTnews he was happy to hear the news.

“Exclusive supply arrangements are never in the best interests of consumers,” he said.

Optus echoed his views.

"Optus welcomes the decisions from both the Minister and the ACCC," said a spokesperson. "This provides industry with certainty and it reinforces the pro-competitive policy reforms associated with the NBN".

NBN Co chief Ziggy Switkowski previously warned that if private sector competitors were allowed to roll out fibre, there could be “severe” implications for the feasibility of the NBN.

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