BROADBAND TO WHERE? A New Definition and Regulatory Framework for the NBN Holly Raiche

BROADBAND TO WHERE?

A New Definition and Regulatory Framework for the NBN

Holly Raiche

Session OutlineWhat is Broadband

What is the NBN

Regulatory Framework for Delivering Broadband

•Legislation/Regulators•Basic Concepts•Competition Regulation

A National Broadband Network•The policy•The Regulatory Framework•New competition rules•A progress report

What Is BroadbandPeak speed (noting distance as a factor)

Dial Up Modem - 56 Kb/s

ISDN - 64 Kb/s

ADSL - 512/128 Kb/s

VDSL - 100 Mb/s - symmetric speeds

WiMax – 10 Mb/s

Satellite – 1 Mb/s – 50 Mb/s

3G – 100 Kb/s – 3 Mb/s

Fibre – 100 Mb/s – to Gb/s

OECD (2006) Download speed 256 Kb/s

FCC (2009) - 768 Kb/s

ITU-T 1.5 - 2Mb/s

(MPEG2 video uses 6 Mb/s)

Government Policies on BroadbandNarrowband to all

1975 - Aust. Telecommunications Commission

1989 - Community Service Obligations

1991 - Universal Service Obligation - to include prescribed carriage services - a possibility?

Broadband to all (?)

1991 - Digital Data Service Obligation - ISDN

BSEG, HiBIS, BSG, etc etc

2007 - Broadband Guarantee

2007 - ALP Election - $4.7 billion, 12 Mb/s, FTTN, to 98% of the population - over 5 yrs

April 2009 – The NBN – FTTP delivering speeds of up to 100Mb/s to 90% of the population, at a cost of $43 billion

THE NBN

WHAT IS THE NATIONAL BROADBAND NETWORK? (NBN)Delivery of Broadband to 100% of Australian Premise (FTTP/FTTH) (up to 100 Mb/s)

•Fibre optical cable to 93% of premises (up to 12 Mb/s_•Fixed mobile to approximately 3% of premises•Satellite to approximately 3% of premises (Up to 12 Mb/s)

Delivered by wholesale only open access provider

By company (NBN Co) Government owned (until at least 8 years ofter network up and running)

Policy Objectives: Competition and Broadband

Improved competition•For fixed line access network - functional or structural separation by Telstra•Government owned NBN Co to provide

•the local access network (plus…)•backhaul in non-competitive areas•which is open access, wholesale only•at a uniform wholesale access price

Ubiquitous Higher Speed Broadband•93% of premises – fibre•7% of premises - wireless (fixed wireless/satellite)

TELELCOMMUNICATIONS: The NBN

TELELCOMMUNICATIONS: The NBN

Aggregation & Backhaul

Service Edge & Core

End UsersApplications & Content

Access

Residential

Non -Residential

Non -Premises

FTTP

Wireless/ Satellite

Smart Metering

Security

InternetInternet

IPTV/ VoD

Voice

Retail NSPs

Wholesale I P NSP

(optional)

ASPs/ CSPs

Multimedia Calling

Education

Health

TELECOMMUNICATIONS: REGULATION

LEGISLATION

Telecommunications Act 1997

Telecommunications (Consumer Protection and Service Standards) Act 1999

Radiocommunications Act 1992

Competition and consumer Act 2010(particularly Parts XIB & XIC)

REGULATORS

Australian Communications and Media Authority (ACMA)

Australian Competition and Consumer Commission (ACCC)

TELELCOMMUNICATIONS: KEY CONCEPTS

PSTN

LEX

Gateway

CANLocal LoopAccess Network

CANLocal LoopAccess Network

Backhaul

LEX

ISPBGR

ISPBGR

KEY CONCEPTS

Carriage - the use of electromagnetic energy to deliver communications at a distance

Telecommunications network (s. 7 TA)

A system or series of systems that carries or is capable of carrying communications by means of guided and/or unguided electromagnetic energy

Radiocommunications (s.6 RA)

A radio emission (any emission of electromagnetic energy of frequencies less than 420 terahertz without artificial guide, whether or not any person intended the emission to occur) or reception or radio emission for the purpose of communicating information between persons and persons, persons and things or things and things

KEY CONCEPTS

Regulation of radiocommunications carriage:

•Telecommunications Act•S. 12 - The Act has effect subject to the Radiocommunications Act 1992 (but the fact that a person is authorised to do something under the RA does not mean they are authorised under TA)•Radiocommunications Act 1992 - Part 3.1 - essentially a prohibition on the operation of an unlicensed radiocommunications device except in exceptional circumstances.

RADIOCOMMUNICATIONSProhibitions

•Operate a radcom device unless authorised by licence•Unlawful possession of radcom device•Cause a radio emission from non-standard transmitter•Have in possession a non-standard transmitter•Supply a non-standard device•Sell/supply a device without required label affixed•Operate or supply a prohibited device

RADIOCOMMUNICATIONS - OVERVIEW

Radiocommunications Act 1992 -

•Spectrum Planning•Radcom licences

•Apparatus•Spectrum•Class

•Technical Regulation•Enforcement

RADIOCOMMUNICATIONS - OVERVIEW

Radiocommunications Act 1992 -

•Spectrum Planning•Radcom licences

•Apparatus•Spectrum•Class

•Technical Regulation•Enforcement

RADIOCOMMUNICATIONSSpectrum Plan

Column 1: ITU Radio Regulations Table of Allocations Column 2: Region 1 Region 2 Region 3 Australian Table of Allocations

315 – 325 AERONAUTICAL RADIONAVIG ATION Maritime radionavigation (radiobeacons) 73 72 75

315 – 325 MARITIME RADIONAVIG ATION (radiobeacons) 73 Aeronautical radionavigation

315 – 325 AERONAUTICAL RADIONAVIG ATION MARITIME RADIONAVIG ATION (radiobeacons) 73

315 – 325 AERONAUTICAL

RADIONAVIG ATION AUS49 MARITIME RADIONAVIG ATION (radiobeacons) 73 AUS68

325 – 335 AERONAUTICAL RADIONAVIG ATION Aeronautical mobile Maritime radionavigation (radiobeacons)

325 – 405 AERONAUTICAL RADIONAVIG ATION 72

335 – 405 AERONAUTICAL RADIONAVIG ATION Aeronautical mobile



RADIONAVIG ATION AUS49 AUS68

405 – 415 RADIONAVIG ATION 76 72

405 – 415 RADIONAVIG ATION 76 Aeronautical mobile

405 – 415 RADIONAVIG ATION 76 AUS68

415 – 435 MARITIME MOBILE 79 AERONAUTICAL RADIONAVIG ATION 72 435 – 495 MARITIME MOBILE 79 79A Aeronautical radionavigation 72 82

415 – 495 MARITIME MOBILE 79 79A Aeronautical radionavigation 80 77 78 82

415 – 495 MARITIME MOBILE 79 79A AERONAUTICAL RADIONAVIG ATION 77 AUS49 82 AUS68

RADIOCOMMUNICATIONSSpectrum Plan

Column 1: ITU Radio Regulations Table of Allocations Column 2: Region 1 Region 2 Region 3 Australian Table of Allocations

315 – 325 AERONAUTICAL RADIONAVIG ATION Maritime radionavigation (radiobeacons) 73 72 75

315 – 325 MARITIME RADIONAVIG ATION (radiobeacons) 73 Aeronautical radionavigation

315 – 325 AERONAUTICAL RADIONAVIG ATION MARITIME RADIONAVIG ATION (radiobeacons) 73


RADIONAVIG ATION AUS49 MARITIME RADIONAVIG ATION (radiobeacons) 73 AUS68

325 – 335 AERONAUTICAL RADIONAVIG ATION Aeronautical mobile Maritime radionavigation (radiobeacons)

325 – 405 AERONAUTICAL RADIONAVIG ATION 72




RADIONAVIG ATION AUS49 AUS68

405 – 415 RADIONAVIG ATION 76 72

405 – 415 RADIONAVIG ATION 76 Aeronautical mobile

405 – 415 RADIONAVIG ATION 76 AUS68

415 – 435 MARITIME MOBILE 79 AERONAUTICAL RADIONAVIG ATION 72 435 – 495 MARITIME MOBILE 79 79A Aeronautical radionavigation 72 82

415 – 495 MARITIME MOBILE 79 79A Aeronautical radionavigation 80 77 78 82

415 – 495 MARITIME MOBILE 79 79A AERONAUTICAL RADIONAVIG ATION 77 AUS49 82 AUS68


Carriers - What are theyowner(s) of network units used to supply carriage services to the public must obtain a carrier licence (s. 42)•network Units

•line link(s)s connecting distinct places over a statutory distance •Designated radiocommunications facilities

•carriage services - service for carrying communications by means of guided and/or unguided electromagnetic energy•supply to the public - if unit used for carriage of communications between two end users where at least one end user is outside immediate circle of owner of network unit


SERVICE PROVIDERS (S. 86)

Includes Carriage and Content Service Providers

Carriage Service Providers (s. 87)

If person supplies a listed carriage service to the public using network units.

Listed carriage service (s. 16)

Carriage service between point in Aust and another point in Aust or point outside Aust

Supply to the public (s. 88 - as before)

Content Service Providers (s. 97(2)

If person uses/proposes to use listed carriage service to supply a content service to the public - is a listed content provider.

Content service (s. 15) is B’casting service, on-line information or entertainment service, any other on-line service by Min. Determination


A Wider Definition of Service Provider?

The Attorney-General’s Dept has proposed a wider definition of CSP for the purposes of the Copyright Act – safe harbour scheme:

Service Provider – to go beyond providers of access to public networks supplied to the public

Could include

•Online search engine

•Bulletin boards

•ISPs providing P2P

•Providers of messaging services, chat etc

Competition in Carriage

In Telecommunications - competition almost always involves access to a competitor’s infrastructure/ services. So necessarily it is about cooperation in a competitive environment.

TA •Schedule 1 - Access to Facilities (towers, ducts, pipes etc)

CCA•Part XIB - Anti-competitive conduct•Part XIC - The Access Regime

ACCESS TO FACILITIES

Carrier requirement to give another carrier access to 1st carrier’s infrastructure (for sole purpose of supplying competing infrastructure/services (given reasonable request and reasonable notice) (Schedule 1, Part 3 TA)

Access to facilities (infrastructure of a telecoms network, or a line, ducts etc for use in connection with a network - def. s. 7)

On agreed terms or arbitrated by ACCC (Cl 18)

Minister can make pricing determination (Cl 19)

Access to network Information

Access to info on likely changes to network facilities

Access to service quality information•NB: Under NBN legislation, now covers access to facilities by carriers AND carriage service providers.

Competition Rules

PART XIBCompetition Rule - Must not engage in anti-competitive conduct

•Breach of basic trade practice rules (Pt IV)•If have substantial degree of market power, take advantage of that power with the effect of substantially lessening competition in that or other Telco markets

Competition Notices

Record Keeping Rules

Part XIC: The Access Regime

Definitions•Access - to listed carriage services•Access Seekers - requested access to a declared listed carriage service•Access Providers•Carriage services•Declared services/active declared services

Objects of Part XIC•Promotion of LTIE•Promotion of competition in markets•Achieving any-to-any connectivity•Encouraging economically efficient use and investment in infrastructure

Part XIC: The Access Regime (cont’d)

Declaration of Service•After a public inquiry - initiated by the ACCC or an individual•Access to declared service through commercial negotiation or arbitration

Standard Access Obligations•Must supply service•Must provide interconnection•Must supply service on equivalent terms and conditions to what provided to self - technical, operational quality, fault detection, handling & rectification•Provision of billing, including timing and content•Access to conditional access customer equipment

The Access RegimeService Declaration – New Process

Explanatory Memorandum: CCS Act

‘Since it is clear that the ‘negotiate-arbitrate’ model is not producing effective outcomes for industry or consumers … the Bill reforms the regime to allow the regulator to set up front prices and non-price terms for declared services. This will create a benchmark which access seekers can fall back on, while still allowing parties to negotiate different terms.’

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THE ACCESS REGIME

• Declaration – Objects of Part XIC: LTIE• Standard Access Obligations (SAO)• ExemptionsNegotiate/arbitrate model replaced with• Access undertakings• Binding rules of conduct• Access determinations

TELECOMMUNICATIONS: Declarations

ACCC can still declare services – LTIE criteriaFor services not supplied by NBN companies:

•Current declarations remain in force•Service supplied by CSP under Special Access Undertakings (SAU) in operation (s. 152CBA )

CSP proposing to supply eligible service gives SAU to ACCC – undertaking to be bound by obligations in 152AR – SAOs - as applicable and terms in SAU)

Expiry•Was 5 years•New - expiry should occur in 3 – 5 years, unless the ACCC considers otherwise

TELELCOMMUNICATIONS: ACCESS OBLIGATIONS –Hierarchy (s. 152 AY)

C/CSP required to comply with any/all SAOs that apply to them – then comply with (in order):

•Access Agreement•Ministerial Pricing Determinations •SAU•Final Migration Plan•Binding Rules of Conduct (BRU)•Access Determination

30ACCESS DETERMINATIONS

ACCESS AGREEMENTS

Special Access Undertakings

Final Migration Plan

Ministerial Pricing Determinations

Binding Rules of Conduct

Key: Prevails over

How it all fits together

ACCESS AGREEMENT (152BE-BED)

•Agreement must be•In writing

•Legally enforceable

•Relate to access to a declared service

•Parties are an access seeker and provider of the service

•Can embody any/all terms and conditions on which service provided, including SAO, BRA, AD•Must be lodged with ACCC within 28 days•If agreement terminated, ACCC must be notified•Compliance both a carrier licence condition and a service provider rule.

MINISTERIAL PRICING DETERMINATION

s. 152CH

The Minister may make a written determination setting out principles dealing with price-related terms and conditions relating to SAOs.

(overrides SAUs, special access undertakings, access undertakings, binding rules of conduct, access determinations)

Is a disallowable instrument

SPECIAL ACCESS UNDERTAKING

Special Access Undertakings (ss. 152CBA ff)Carrier/CSP who is/expects to supply a listed carriage service or service that facilitates the supply of a listed carriage service

May give a Special access Undertaking (SAU) to ACCC – stating (apart from service/T&C of supply of service)•That it agrees to be bound by SAOS as applicable and•Undertakes to comply with T&C in the SAU•Must be consistent with relevant SAOs and Ministerial Pricing Determinations

•Can be accepted or rejected by the ACCC•ACCC must maintain a register of SAUs

(NB: No more ordinary Access undertakings – the same effect is achieved with the Access Determinations)

BINDING RULES OF CONDUCT

•Can be made by the ACCC (152BD-BDN)•About:

•T&C on which C/CSP complies with applicable SAOs, •Extend/enhance capability of facility•Require compliance etc•(with limitations on the power)

•May be of general application, or limited to specific class of C/CSP or specific C/CS•Duration – no more than 12 months•Can be overridden by access agreements•Compliance a carrier licence condition and service provider rule

ACCESS DETERMINATIONS

ACCC can make AD (152BC-BCW) that•Specify any or all terms and conditions for compliance with SAOs•Specify any other terms and conditions of an AS’s access to the declared service•Provide that any or all SAOs are not applicable to a C/CSP•Deal with any other matter relating to access to the declared service •may make different provision with respect to different C/CSP or AS

•Cannot override Access Agreements•Can include Fixed Principles (152BCD)

•Can make Interim Access Determinations

•Cannot be made until after public inquiry

•Compliance: carrier licence condition or service provider rule

•Must be register of ADs

Functional/Structural Separation

Under CCS Act, Telstra could:

Functionally Separate•Separation of Telstra’s wholesale/retail units

•Undertaking to divest interest in HFC Cable/FOXTEL (each/both can be exempted by Minister)

•Minister can limit allocation of spectrum licence

OR

Structurally SeparateUndertaking will not supply fixed line carriage service/control of company that supplies fixed line services to retail customers using telecommunications network by 1 July 2018.

TelecommunicationsThe Alternative: Structural Separation

(s. 577A TA)

Telstra will not supply fixed line carriage services (or in a position to control) company that supplies) using a telecommunications network over which Telstra is in a position to exercise control.

Taking into account:

Matter relating to transparency and equivalence in relation to the supply by Telstra of regulated services to Telstra wholesale customers and Telstra retail business units

STRUCTURAL SEPARATION

Definitive Agreement 23 June 2011 NBN Co – with Telstra and Optus

•NBN Co access to infrastructure (pipes, ducts)•Reuse of infrastructure by NBN Co•Telstra/Optus to progressively decommission copper local access network and HFC network•Government funding provided

Dependent on •Shareholder approval; and•ACCC approval of Telstra’s Structural Separation Undertaking•BY 20 December 2011

PROGRESS ON NBN

•ACCC to declare the NBN Layer 2 bitstream service – once done will not have expiry date

So….

•ACCC Discussion paper on service level description for declaration – by April 2012

•NBN to submit a Standard Access Undertaking for its service – including terms and conditions of service and

• a wholesale Broadband agreement (in essence an access agreement) (now on version 4 – modified so it is an interim document lasting only a year (one of main issues – service level rebates)

STRUCTURAL SEPARATION

Structural Separation documents to contain•Telstra (and Optus) commitment to cease to supply specified services by designated day•Equivalence and transparency measures leading up to designated day•Migration plan – movement of fixed line services to NBN Co

ACCC concerns•No compliance plan•No clear commitment to equivalence of outcomes•Agreements between NBN Co and Telstra (and Optus) access agreements (no ACCC scrutiny)•A broad variation mechanism

Telecommunications

Documents

BROADBAND TO WHERE? A New Definition and Regulatory Framework for the NBN Holly Raiche