ACCC to scrutinise impact of NBN, 5G on telco competition

Competition watchdog launches market study

The Australian Competition and Consumer Commission will launch a market study of the communications industry that will examine the impact on competition of changes in the sector including the National Broadband Network rollout, the growth in consumers’ bandwidth demands and the impending launch of 5G mobile services.

The competition watchdog’s chairperson, Rod Sims, announced the study at the ACCC/AER Regulatory Conference.

The ACCC said it will release an issues paper and a draft report of its findings ahead of the completion of the study next year.

Issues to be assessed include the impact of the NBN rollout on competition in the sector. The ACCC announced last month that it would force fixed-line network operators that provide ‘superfast’ broadband services to consumers to open up their networks to competitors.

That decision appears to have, for now at least, effectively killed off the threat of competing infrastructure that could undermine the economics of the National Broadband Network by closing a loophole in ‘anti-cherry-picking’ laws designed to protect the NBN.

In the past Sims has called for NBN itself to be broken up in order to promote infrastructure-based competition.

"It will be strongly in Australia's long term interests for, say, three separate entities based on delivery technology to be sold that can provide a platform for future infrastructure based competition," Sims argued in late 2014.

One of the recommendations in a report of the Vertigan panel, which was appointed by the government to conduct a cost-benefit analysis of the NBN, was that the NBN be split up.

The report recommended “the disaggregation and divestment of NBN Co’s transit, satellite and fixed wireless business units, along with associated obligations, including with ongoing subsidies if they prove to be necessary”.

Separate businesses could operate the satellite service, the fixed wireless network and the HFC network, while NBN continued to operate the FTTx network, the report said.

The ACCC said that the impact of so-called ‘over the top’ (OTT) services, which use the Internet as a delivery platform, will also be examined as part of the study. Examples of OTT services include entertainment services such as Netflix and other streaming services as well as social network and communications services, such as Facebook and WhatsApp.

Another area to be scrutinised will be the growth in non-fixed-line network services, such as the increasing use of cellular data and Wi-Fi services for Internet access, with the ACCC noting the impact that 5G, expected to be rolled out in Australia by 2020, is set to have on available mobile bandwidth.

The ACCC said that market studies can be used to identify whether there is adequate competition in a sector, as well as identify barriers to competition and possible solutions.

“Rapidly evolving technological developments, structural change within the sector, product innovation, and changing consumer preferences are all contributing to this change,” Sims said.

“We recognise the communications sector is one that all Australians have an interest in, and one that facilitates economic growth,” the ACCC head said.

“Importantly, the study will also allow the ACCC to consider a wide range of interrelated issues that have been raised by the sector and that go to the proper functioning of the market.

“The study will examine the changing landscape and identify any issues preventing the use of innovation and investment to deliver the benefits of competition to consumers.”

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Tags broadbandnational broadband networkTelecommunicationsNational Broadband Network (NBN)Australian Competition and Consumer Commission (ACCC)5G

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