The federal government is planning to force telcos building fibre-to-the-basement networks that compete with the NBN to functionally separate their wholesale and retail businesses and offer rival service providers a Layer 2 wholesale service for $27 per month.
Communications Minister Malcolm Turnbull in September announced he would start discussions with industry on introducing a telecommunications license condition that would require all high-speed fibre-to-the-basement carriers to offer wholesale access to their networks.
The announcement came as a response to an ACCC ruling on TPG’s build of an FTTB network in capital cities, which found the internet service provider had not breached NBN anti-cherry picking legislations with its FTTB rollout.
The ACCC confirmed that the TPG rollout falls within loopholes in the legislation - which were designed to protect the national broadband network from private operators cherry picking low-cost, high-density areas to build or upgrade their networks - that exempt fibre laid before 1 January 2011 and extensions that don’t exceed one kilometre.
The ACCC at the time vowed to continue investigating the matter through a declaration inquiry, but Turnbull said the process would take too long and instead decided to consult on a new license, which would apply to all carriers.
The draft conditions [pdf], released today, reveal plans to force operators of high-speed networks (those with download speeds of 25Mbps or higher) servicing residential customers to “functionally separate their wholesale and retail operations” and offer access to competing service providers “on the same non-discriminatory terms as those provided to their own retail operations”.
The carrier’s wholesale company would be required to offer a Layer 2 wholesale service to other carriers and service providers priced at $27 per month.
“The Government's aim is to ensure that carriers provide wholesale access to fibre-to-the-basement and similar networks and remove the ability to favour their own downstream retail operations over other retailers on the network,” Turnbull’s office said in a statement.
“Without such arrangements competition and consumers can suffer. These are equivalent issues to those addressed by the structural separation of Telstra and NBN Co’s wholesale-only operation.”
Carriers and interested parties have been asked to provide submissions on the draft conditions by November 14.
Should it go ahead, the licence declaration would commence from the start of January next year, and expire at the end of November 2016.