Turnbull flags new rules on retail, wholesale separation for telcos

Turnbull announces new licence condition that could potentially force telcos such as TPG to functionally separate their retail and wholesale arms

Communications Minister Malcolm Turnbull announced this morning that he will consult with the telco industry on new rules that would potentially force network operators that want to compete with National Broadband Network infrastructure to split their wholesale and retail operations.

Turnbull's announcement came in the wake of the Australian Competition and Consumer Commission revealing that it would not act against TPG's rollout of fibre-to-the-basement infrastructure that will compete with the NBN.

Although the ACCC said TPG had not breached so-called anti-cherry picking rules designed to shore up NBN Co's business case, it will consider 'declaring' vectored VDSL services of the type TPG will be offering. Declaring a service allows the ACCC to regulate access to it.

"The ACCC will consider declaring vectored VDSL services as part of the superfast broadband access service declaration inquiry that is has now commenced," an ACCC statement said.

The process of declaring a service can take up to 12 months, said a statement issued by Turnbull, which "creates a window of potential instability and industry uncertainty"

"I am therefore proposing to consult industry in coming weeks on a new telecommunications licence condition, which will apply to all carriers," Turnbull said.

"Under existing arrangements, affected carriers must be consulted for at least 30 days prior to the new licence condition being finalised.

"The licence condition would require owners of high-speed networks affected by the ACCC's declaration process to functionally separate their wholesale operations, and to provide access to competing service providers on the same terms as it is provided to their own retail operations.

"This licence condition would remain in place for two years – allowing the ACCC to undertake its declaration inquiry, the recommendations of the Vertigan panel to be properly considered, and long-term regulatory arrangements for the sector to be settled."

Follow Rohan on Twitter: @rohan_p

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