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Inquiries Into NBN Access Pricing and Wholesale Service Standards Inquiries into NBN access pricing and wholesale service standards Final report November 2020 accc.gov.au Australian Competition and Consumer Commission 23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601 © Commonwealth of Australia 2020 This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a Creative Commons Attribution 3.0 Australia licence, with the exception of: the Commonwealth Coat of Arms the ACCC and AER logos any illustration, diagram, photograph or graphic over which the Australian Competition and Consumer Commission does not hold copyright, but which may be part of or contained within this publication. The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence. Requests and inquiries concerning reproduction and rights should be addressed to the Director, Content and Digital Services, ACCC, GPO Box 3131, Canberra ACT 2601. Important notice The information in this publication is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as a statement of the law in any jurisdiction. Because it is intended only as a general guide, it may contain generalisations. You should obtain professional advice if you have any specific concern. The ACCC has made every reasonable effort to provide current and accurate information, but it does not make any guarantees regarding the accuracy, currency or completeness of that information. Parties who wish to re-publish or otherwise use the information in this publication must check this information for currency and accuracy prior to publication. This should be done prior to each publication edition, as ACCC guidance and relevant transitional legislation frequently change. Any queries parties have should be addressed to the Director, Content and Digital Services, ACCC, GPO Box 3131, Canberra ACT 2601. ACCC 11/20_20-65 www.accc.gov.au Contents Abbreviations and acronyms ................................................................................................. 1 1. Executive Summary ....................................................................................................... 3 2. Introduction .................................................................................................................... 5 2.1. Role of regulation .................................................................................................... 5 2.2. Wholesale access to the NBN ................................................................................. 5 2.3. Our public inquiries into NBN access terms ............................................................ 5 2.4. The regulatory assessment framework ................................................................... 9 2.5. Key findings .......................................................................................................... 10 2.6. Structure of this final report ................................................................................... 12 Part A—Price related terms and conditions of access ......................................................... 14 3. Discussion of the price related terms of the access arrangements ............................... 14 3.1. Entry-level access pricing ..................................................................................... 14 3.2. Pricing certainty of NBN Co’s access products ..................................................... 18 3.3. Other pricing related access terms ........................................................................ 20 4. ACCC consideration of the price related access arrangements against the statutory assessment framework ....................................................................................................... 23 4.1. Long-term interests of end-users .......................................................................... 23 4.2. Legitimate business interests ................................................................................ 25 4.3. Interests of all persons who have a right to use the declared service .................... 25 4.4. Direct costs of providing access ............................................................................ 25 4.5. Value of extensions or enhancements borne by someone else ............................. 26 4.6. Safe and reliable operation ................................................................................... 26 4.7. Economically efficient operation ............................................................................ 26 4.8. The proposed access arrangements and NBN-specific restrictions ....................... 26 Part B—NBN Co’s service standards proposals .................................................................. 27 5. Discussion of service standards in NBN Co’s proposed access arrangements ............ 27 5.1. Connections and faults ......................................................................................... 27 5.2. Missed appointments ............................................................................................ 31 5.3. Underperforming service speeds .......................................................................... 33 5.4. Service information and operational matters ......................................................... 40 5.5. Consumer safeguards ........................................................................................... 44 6. ACCC consideration of the service standards related access proposal against the statutory assessment framework ......................................................................................... 49 6.1. Long-term interests of end-users .......................................................................... 49 6.2. Legitimate business interests ................................................................................ 51 6.3. Interests of all persons who have a right to use the declared service .................... 51 6.4. Direct costs of providing access ............................................................................ 52 6.5. Value of extensions or enhancements of capability by someone else ................... 52 6.6. Safe and reliable operation ................................................................................... 52 6.7. Economically efficient operation ............................................................................ 52 Appendix A: Matters the ACCC must take into account in making an access determination 53 Appendix B: Segment analysis for the NBN 12/1 product .................................................... 61 Abbreviations and acronyms 4G 4th generation mobile communications technology ABS Australian Bureau of Statistics ACCAN The Australian Communications Consumer Action Network ACCC Australian Competition and Consumer Commission ACMA Australian Communications and Media Authority ADSL Asymmetric digital subscriber line API Application programming interface AVC Access virtual circuit B2B Business to Business BCAR Bureau of Communications and Arts Research CCA Competition and Consumer Act 2010 (Cth) CSG Customer Service Guarantee CSP Carriage service provider CVC Connectivity virtual circuit FAD Final Access Determination FTTB Fibre to the building FTTC Fibre to the curb FTTN Fibre to the node HD High definition IAD Interim Access Determination Kbps Kilobits per second LTIE Long-term interests of end-users MBA Measuring Broadband Australia Mbps Megabits per second mELB Modified entry-level bundle NBN National Broadband Network NBN Co National Broadband Network Company Limited NSNW New service never worked 1 PA Priority Assistance PIR Peak information rate RKR Record keeping rule RSP Retail Service Provider SAU Special access undertaking SAO Standard access obligations SD Standard definition SIO Services in operation SIP Statutory Infrastructure Provider SQ Service qualification TC-2 Traffic Class 2 TC-4 Traffic Class 4 TIO Telecommunications Industry Ombudsman WBA Wholesale Broadband Agreement WBA3 Wholesale Broadband Agreement 3 WBA4 Wholesale Broadband Agreement 4 WSSI Wholesale service standards inquiry 2 1. Executive Summary In this report we set out our findings in respect of our public inquiries into NBN entry level pricing and NBN wholesale service standards. We consider that the following NBN access arrangements should be made available to access seekers in order to promote the long-term interests of end-users (LTIE), and balance the competing business interests of NBN Co as the access provider with those of its access seekers: • The price of NBN Co’s entry-level broadband access bundle should reduce to $24.70 for the period from December 2020 to April 2021, and then to $22.50 for the period from May 2021 to November 2022 (down from $28.20 when our inquiry commenced and currently $26.60). • Access seekers should receive additional certainty over the access products and prices that will be available to them over time, via: o additional protections regarding the withdrawal of NBN Co’s access bundles, o price caps and CVC allowance floors to apply to these access bundles. • Service transfer charges and service reactivation charges should rebalance at $5 per transfer or reactivation (previously $22.50 and $0 respectively when our inquiry commenced). • Stronger and more effective wholesale service standards that include: o no wholesale charges
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