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2010/TEL41/PLEN/018

Agenda Item: 6

Australia’s Regulatory Update

Purpose: Information

Submitted by: Australia

/ 41stTelecommunications and Information Working Group Meeting - Plenary Session
Chinese Taipei
10-12 May 2010

AUSTRALIA: REGULATORY UPDATE – MAY2010

HIGHLIGHTS

National Broadband Network – Regulatory Issues

The Australian Government has indicated that it will introduce legislation to govern the National Broadband Network company, facilitate the deployment of fibre, and require new developments to use FTTP technology from 1 July 2010. Exposure drafts of the legislation to govern the NBN company was release for public comment in February 2010. The legislation in relation to fibre in new developments was introduced into the Australian Parliament on 18 March 2010, following extensive public consultation.

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009

The Australian Government announced on 15 September, fundamental reforms to existing telecommunications regulations in the interests of Australian consumers and businesses.
The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 introduces a package of legislative reforms aimed at enhancing competitive outcomes in the Australian telecommunications industry and strengthening consumer safeguards

The package has three primary parts: addressing Telstra’s vertical and horizontal integration; streamlining the access and anti-competitive conduct regimes; and strengthening consumer safeguard measures such as the Universal Service Obligation, the Customer Service Guarantee and the Priority Assistance arrangements for customers with life threatening conditions.

Digital Television Switchover

The Australian Government has announced a progressive, region-by-region switch to digital free-to-air television by 31 December 2013. Switchover will occur in Mildura/Sunraysia on 30 June 2010 and regional South Australia on 15 December 2010. State capitals such as Sydney, Melbourne, and Adelaide will switch during 2013.

Survey results show that nationally, 6 in 10 Australian households are now converted to digital free-to-air television. In Mildura/Sunraysia, the number of households receiving free-to-air digital channels has reached 79%. In regional South Australia, the reported conversion level is 64%.

Other switchover measures to drive the transition to digital TV are as follows:

  • The Government is funding a new satellite digital television service to provide the full range of digital free-to-air television channels to remote, regional and metropolitan viewers who are unable to receive adequate reception from the local digital terrestrial transmission facility;
  • Accreditation schemesand quality assurance audits involving suppliers and retailers of digital TV equipment and antenna installers—to assist consumers make informed choices on switchover products and related services;
  • Household Assistance Scheme - eligible households, such as recipients of full rate pensions, will receive a high definition set top box (including installation and demonstration services) and any necessary antenna and cabling work, if required.
  • A National and Localised information and communication campaign to improve household awareness and understanding of switchover.

Cyber Security Awareness Raising

The Department of Broadband, Communications and the Digital Economy continues to implement its package of awareness initiatives to help home users, school students and small businesses strengthen their computer defences and improve their online behaviour. The annual National Cyber Security Awareness Week aims to help Australians understand cyber security risks and educate home and small business users about the simple steps they can take to protect themselves, their families and their businesses online.

National Cyber Security Awareness Week 2010 will be held from 6 to 11 June. The Department, along with its partner Government agencies, industry and community organisations is planning a range of activities to be held around the country during the Week.

The Department has also successfully promoted the Budd:e Cyber Security Education Package, which is designed to raise the cyber security awareness of Australian primary and secondary school students. There has been very strong uptake of the Package by educational institutions with the vast majority of feedback being extremely positive.

Spectrum Management – 15 Year Spectrum Licences

In March 2010, the Minister for Broadband, Communications and the Digital Economy announced that telecommunications providers who are using their 15 year spectrum licences to provide services to significant numbers of Australian consumers or have in place networks that are capable of providing services to a significant number of consumers will be offered licence renewal provided they meet certain public interest criteria.

DEVELOPMENTS DURING 2009-2010

National Broadband Network

A key element of the Australian Government’s telecommunications policy is the rollout of a new high speed National Broadband Network. The Australian Government recognises thataccess to high-speed broadband services is critical to Australia’s future social and economic prosperity.

One year after the Government’s initial announcement (April 2009), significant progress has been in planning the network rollout.

The new network will:

  • provide all Australians with access to affordable high speed broadband either via fibre to the premises or next generation wireless and satellite technologies;
  • be the Australian Government’s largest ever infrastructure project;
  • provide fibre optic transmission links connecting cities, major regional centres and rural towns;
  • be Australia's first national wholesale-only, open access broadband network; and
  • be built and operated on a commercial basis by a company established at arm's length from Government and involve private sector investment.

Progress so far

NBN Co established

A new company – NBN Company Limited (NBN Co) was established in April 2009 as a Government Business Enterprise to build and operate a wholesale-only, open access National Broadband Network over eight years.

CEO Mike Quigley was appointed in July 2009 and nine Directors now constitute its Board of Directors including Harrison Young as the Chair.

NBN Co has also appointed most of its senior management team, and it continues to grow its workforce, currently about 150 staff.

Roll out in Tasmania

Tasmania is progressing as the launch state (province) for the NBN with NBN Tasmania Limited established as a subsidiary of NBN Co.

The three stages of rollout in Tasmania have been announced and Stage 1 is well underway with services commencing in the communities of Smithton, Scottsdale and Midway Point by July 2010.

Another seven centres will be connected under Stage 2: Sorell, Deloraine, George Town, St Helens, Triabunna, KingstonBeach, and South Hobart.

Under Stage 3, announced on 1 March 2010, another 90,000 premises will be connected – 40,000 in Hobart, 30,000 Launceston, and 10,000 in each of the towns of Devonport and Burnie.

In all, the three stages will provide 100,000 Tasmanian premises with access to superfast fibre optic services. The full state-wide rollout will connect 200,000 homes, businesses, schools and hospitals in Tasmania over five years with optic fibre capable of delivering speeds of 100 megabits per second.

On 15 March 2010, the Mornington Proof-of-Concept Test Centre was opened and the first retail service providers - iPrimus, Internode and iiNet - who will work with NBN Tasmania to deliver broadband services were announced.

The Test Centre will provide retail service providers with access to a live environment to test their services as part of the roll out of the NBN as well as the platform and capability for the service providers to test and refine innovative new services that will be offered to customers.

Regional Backbone Black Spots Program

The Government has engaged Nextgen Networks to roll out almost 6,000kilometres of new fibreoptic backbone transmission links under the $250 million Regional Backbone Blackspots Program. This Program will improve the supply of backbone transmission links to regional centres where there is a lack of competitive backbone infrastructure. The six priority locations were identified following a public consultation process.

Nextgen will be rolling out transmission links to Geraldton, Western Australia; Darwin, Northern Territory; Emerald and Longreach, Queensland; Broken Hill, New South Wales; Victor Harbor, South Australia; and the South West Gippsland region, Victoria.

These links represent the first building blocks of the NBN on mainland Australia and are expected to benefit about 400,000 people in 100 regional locations and provide more than 1000 jobs.

In February 2010, construction commenced near Mt Isa on the longest link and approximately 600 km of fibre has already been rollout out on the Darwin to Toowoomba route. Construction of all links is expected to be completed within 18 months of commencement and services on each link will be activated as they are completed.

First release test sites

On 2 March 2010, NBN Co announced five first release sites to receive high speed broadband on mainland Australia. NBN Co will use these first sites to test network design and construction techniques to suit different geographical regions across Australia.

Following the announcement of the first release sites project in March 2010, NBN Co has engaged with local authorities, relevant Federal and State Members of Parliament, Premiers and electricity utilities to create an understanding of the company’s project plan and its intentions. NBN Co will build relationships with each of the local authorities and utilities to ensure it takes full account of their requirements as the project progresses. NBN Co has engaged Community Relations consultants to create and execute comprehensive stakeholder engagement plans in each first release site.

The company has also conducted a number of briefings and Question and Answer sessions in Sydney, Melbourne, Adelaide, Perth and Brisbane on the network architecture, construction strategy and operational plans.

NBN Co has also released its initial views on the wholesale bitstream product that it plans to offer, and reviewed over 50 submissions on this topic and released a response to these submissions.

It has also released Requests for Capability Statements for a next generation satellite solution to service regional Australia and for the design and construction of the Fibre Access Network.

Implementation Study

In August 2009, the Government appointed a consortium of McKinsey / KPMG, to carry out a comprehensive Implementation Study on the NBN which was completed and provided to Government on 5 March 2010.

The Governments is now carefully considering the Study and will provide a response by mid 2010.

The Implementation Study is a comprehensive document which runs to hundreds of pages and contains more than 80 recommendations to Government. It addresses the Government’s coverage, commerciality and competitive policy objectives and provides advice on,amongst other things, detailed operating arrangements of NBN Co, ownership and structure, ways to attract private sector investment; and the longer term privatisation objective for the company.

Regulatory Issues

Fibre in New Developments

The Australian Government introduced legislation on 18 March 2010 to amend the Telecommunications Act 1997 to provide for the installation of fibre or fibre-ready infrastructure in new developments. The legislation provides for the Minister for Broadband, Communications and the Digital Economy to specify, in subordinate legislation, developments or classes of developments in which:

  • fixed lines that are installed must be optical fibre; and
  • fixed line facilities (e.g. conduits) that are installed must be fibre-ready facilities.

The legislation also provides for a regime to facilitate third party access to fibre-ready facilities to be set out in regulations.

Proposed regulatory framework for the National Broadband Network

On 24 February 2010 the Government released exposure drafts of legislation outlining:

  • NBN Co’s wholesale-only obligation, mechanisms for the sale of NBN Co and ownership, reporting and governance a arrangements; and
  • NBN Co’s access arrangements, including transparency and non-discrimination requirements.

The Government is currently considering submissions on the draft legislation.

Regulatory Reforms to facilitate the roll-out of the National Broadband Network

Legislation is currently before the Australian Senate that would facilitate access to network information held by carriers and utilities that could assist NBN Co in the design and roll-out of its network.

The Australian Government will consider further possible legislative changes to facilitate the roll-out of new superfast broadband infrastructure in light of the report of the NBN Implementation Study and advice from NBN Co.

Regulatory reform

The Australian Government conducted a public consultation during the first half of 2009 that canvassed possible legislative reforms to improve competition, strengthen consumer safeguards, remove unnecessary red tape and make the existing regulatory framework work more effectively, particularly during the roll-out of the National Broadband Network. The bills of the draft legislation, as well as information on the National Broadband Networks are available at The 140 submissions received that overwhelmingly supported the need for significant reform.

On 15 September 2009, the Government introduced the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 into Parliament to address the need for telecommunications regulatory reform and promoting the long term interests of end-users, without imposing unnecessary burdens on business.

Specifically, the purpose of the legislation is to:

  • address Telstra’s high level of integration to promote greater competition and consumer benefits;
  • streamline the arrangements through which telecommunications providers access wholesale level services (declared services) under Part XIC of the Trade Practices Act 1974 (TPA);
  • reform the arrangements in Part XIB of the TPA so that the regulator can better address breaches of competition law; and
  • protect consumers during the transition to the National Broadband Network by strengthening the enforcement of telecommunications consumer safeguards.

The draft legislation has passed the lower house (the House of Representatives) and is now subject to debate and passage in the upper house (the Senate).

Copies of the Bill, regulatory reform discussion paper, non-confidential submissions are available at .

International Mobile Phone Roaming

The Australian Government response to Phoning home: Report of the inquiry into international mobile roaming was tabled in Parliament on 9 September 2009. The Government agreed with three of the five recommendations contained in the report, noted a fourth recommendation on the Australian Competition and Consumer Commission reporting requirements and did not agree with a fifth recommendation concerning temporary number portability. The Department of Broadband, Communications and the Digital Economy is currently pursuing the agreed recommendations in a number of international fora including APEC TEL, ITU, OECD, APT and the WTO.

With significant Australian input, an ITU questionnaire has been completed with the results to be considered at an ITU meeting in Seoul inMay 2010. The OECD has completed two analysis papers on the situation in OECD countries.

Australia will host an Asia-Pacific Telecommunity Workshop on international mobile roaming on Brisbane on 8-10 June 2010. The workshop will identify the current structure of the IMR market, pricing structures, consumer information and quality of services (including prepaid roaming, coverage and inadvertent border roaming). It will also engage participants in round tables to encourage discussion of how the APT should address these issues. More details are available at

Statutory Review of Management and Protection of Submarine Cables

In December 2009 the Australian Communications and Media Authority (ACMA) commenced a statutory review of Schedule 3A to the Telecommunications Act 1997 which provides for the management and protection of submarine cables in Australian waters. The ACMA has not identified any significant issues with the operation of Schedule 3A, but has nevertheless sought written submissions on its operation. Submissions closed on 1 March 2010. The ACMA will report to the Minister for Broadband, Communications and the Digital Economy later in 2010.

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009

The Australian Government announced fundamental reforms to existing telecommunications regulations in the interests of Australian consumers and businesses.These reforms are aimed at driving future growth, productivity and innovation across all sectors of the economy by:

  • addressing Telstra’s high level of integration to promote greater competition and consumer benefits;
  • streamlining and simplifying the competition regime to provide more certain and quicker outcomes for telecommunications companies;
  • strengthening consumer safeguards to ensure services standards are maintained at a high level; and
  • removing redundant and inefficient regulatory red-tape.

Addressing Telstra’s vertical integration

The legislation will allow Telstra to voluntarily submit an enforceable undertaking to the Australian Competition and Consumer Commission to structurally separate.

If Telstra chooses not to structurally separate, the legislation provides for the Government to impose a strong functional separation framework on Telstra. This Bill [1]proposes implementing a functional separation regime by altering the Telecommunications Act 1997 to require that:

  • Telstra conduct its network operations and wholesale functions at arm’s length from the rest of Telstra;
  • Telstra provides equivalent price and non-price terms to its retail business and non-Telstra wholesale customers; and
  • this equivalence of treatment is made transparent to the regulator and competitors via strong internal governance structures.

Addressing Telstra’s horizontal integration

The legislation will seek to promote competition across telecommunications platforms while allowing Telstra the flexibility to choose its future path. Telstra will be prevented from acquiring additional spectrum for advanced wireless broadband while it:

  • remains vertically integrated; and
  • owns a hybrid fibre coaxial cable network; and
  • maintains its interest in Foxtel.

Reforms to the Competition Regime

The legislation will streamline the arrangements in Part XIC of the Trade Practices Act 1974 (TPA) which allow parties to access regulated services so that:

  • the ACCC will determine up-front terms and conditions for a three to five year period, following consultation with industry;
  • the ACCC can determine principles to apply for longer periods; and
  • the ACCC can make binding rules of conduct to immediately address problems with the supply of regulated wholesale services

The legislation will also reform the arrangements in Part XIB of the TPA so that the ACCC can address breaches of competition law and conduct damaging to the market. The ACCC will no longer have to consult with a party before issuing a competition notice; a process previously prone to delay and obstruction.