Rein in ACCC, let NBN Co discriminate: Vertigan report

The Australian Competition and Consumer Commission (ACCC) should be required to conduct a cost-benefit analysis for major decisions and be subject to merit reviews, the first Vertigan Panel regulatory review has suggested.

The ACCC would also be subject to greater oversight on long-term decisions such access determinations, and obliged to explain why it believes the benefits of a declaration exceed the costs.

When the ACCC makes decisions of enduring impact, these should be subject to regulatory oversight.

Specifically, decisions in relation to access determinations, anticipatory exemptions and special access undertakings should be subject to full and effective merits review, subject only to the limitations in scope and application required to prevent clearly unnecessary delays to regulatory decisions (section 3.9.5).

- Vertigan Report [pdf]

The report - written by a panel assembled by the Coalition government in December last year, including Alison Deans, Henry Ergas, Tony Shaw and chair Dr Michael Vertigan - was tabled in parliament late last night by Communications minister Malcolm Turnbull.

Among its 34 recommendations, the report suggested that two sections of the Competition and Consumer Act 2010 be replaced by provisions that allow discrimination by NBN Co "where it aids efficiency or is otherwise authorised by the ACCC".

Currently, NBN Co is required to provide services to access seekers on equal basis. The Competitive Carriers Coalition has opposed relaxed non-discrimination rules for NBN Co, fearing such a move would favour large providers over smaller players.

Such concerns could be addressed by specifying precisely the type of discrimination that is allowed and limit them, the panel suggested.

Minister Turnbull acknowledged that relaxing what he termed were "very tight anti-discrimination restrictions on NBN Co" may be of concern to some carriers, but added that such a move potentially offers the greatest benefit to small players.

If NBN Co faces competition in the longer term, the Vertigan Panel wants all non-discrimination clauses to be removed. It argued that competition will be sufficient to prevent NBN Co from disadvantaging certain customers.

Declaration of VDSL broadband over copper, the favoured transmission method under the Coalition's multi-mix fibre to the node NBN architecture, should be considered by the ACCC after a public inquiry, the panel suggested.

A second report with review of NBN regulation, as well as an adjunct cost-benefit review, is also to be delivered by the panel later this month.

Full text of the first Vertigan Panel report below.