TPG offered sliver of hope in bid to overturn NBN protectionism

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TPG offered sliver of hope in bid to overturn NBN protectionism

Competition watchdog may be open to small-scale proposals.

TPG Telecom’s bid to be allowed to roll out fixed-line infrastructure that competes with NBN Co again remains a live - albeit limited - possibility after the competition watchdog left the door open to future small-scale proposals.

For a time, TPG had been able to compete with NBN Co in city areas by rolling out a fibre-to-the-basement (FTTB) network - in most cases before NBN Co could deploy its own infrastructure.

A regulatory change put a stop to the FTTB rollout, but TPG asked in October for the regulations to be overturned as part of a scheduled review of the rules.

TPG argued that NBN Co should no longer be “artificially insulated ... from competition” now that the govermment-backed network is mostly completed.

TPG had wanted the main piece of regulation that thwarted its FTTB ambitions - which is known as the superfast broadband access service (SBAS) - scrapped.

That is set to fail with the Australian Competition and Consumer Commission’s (ACCC’s) draft decision on Friday [pdf] detailing plans to extend the SBAS - and therefore broad infrastructure-based competition in NBN fixed-line areas - through to July 2026.

The ACCC believed the prospects of duelling fixed-line networks on a large scale were poor, but left the door open to smaller scale proposals.

“The ACCC recognises that in some areas it may be commercially viable for multiple superfast broadband networks to co-exist,” the commission said.

“The ACCC will consider the merit or otherwise of a framework to exclude networks covered by the SBAS declaration from future regulation under the declaration. 

“We will give further consideration to this issue and a number of other issues discussed in this draft decision having regard to submissions.”

It added that “this is generally the exception rather than the norm”, suggesting any allowances will be only small-scale.

The commission said it would accept submissions on this - as well as its draft decision - until February 19 2021.

On a larger scale, the ACCC said that “economic and technical barriers to entry generally prevent multiple fixed line network providers from operating in the same service area and competing at a wholesale level.”

“There is usually insufficient customer demand to sustain two rival fixed line networks, and where competition from mobile and fixed wireless networks is not effective, this results in localised monopolies with the ability to extract monopoly rents from end-users,” it said.

The ACCC also disputed concerns raised by TPG that a continuation of SBAS would be - in the commission’s words - “detrimental to investment which will impede the evolution of effective competitors to the NBN”.

“The ACCC notes that TPG has previously expressed its intention to provide wholesale access to its FTTB network even without access regulation through declaration or the government’s carrier licence conditions,” the commission said.

“Since the SBAS was declared in 2016, TPG has continued to operate a vertically-integrated network offering superfast broadband services at rates competitive with NBN based retail plans whilst delivering comparable speeds.

“The ACCC therefore does not consider that continued declaration will have a significant effect on TPG’s ability to undertake efficient investment and compete with the NBN.”

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