NBN Co a 'low' threat of overbuilding in greenfields estates

NBN Co is considered a “low” threat of using new powers to overbuild other networks in new housing estates in the short to medium term.

The assessment, made by the Australian Competition and Consumer Commission (ACCC), is contained in a draft decision [pdf] around infrastructure-based competition that was released at the end of last week.

Although partially redacted, the ACCC said that some overbuild decisions taken by NBN Co in the past had resulted in favourable outcomes for broadband users in those areas.

“The ACCC is aware of some instances where NBN Co has improved network competition in superfast broadband markets,” the commission said.

“For example, NBN Co overbuilt TPG’s VDSL2 network in Canberra and a significant proportion [redacted] of TPG’s FTTB [fibre-to-the-basement] network in metro areas.

“In greenfield developments, the ACCC understands that NBN Co has overbuilt some private FTTP networks with its own FTTP infrastructure.”

Prior to a September change to the government’s telecommunications in new developments (TIND) policy, NBN Co needed to seek ministerial approvals before it could overbuild someone else’s network in a new development.

The approvals are no longer required and NBN Co has greater autonomy to make overbuild decisions itself.

The ACCC noted that the change “raises the prospect of greater competition in broadband services networks within local geographic areas in the future, within the bounds of NBN Co adhering to competition law and competitive neutrality requirements.”

However, the ACCC was unsure to what extent NBN Co would bother, and believed it was unlikely in any event that much action would occur in the immediate future.

“The ACCC is unable to currently form a view on the extent to which this policy change will result in NBN Co overbuilding non-NBN networks,” the commission said.

“In residential areas in particular, there is generally not enough customer demand to maintain two rival networks. 

“The ACCC considers that in the short to medium term, the threat of entry by NBN Co to incumbent network operators is likely to be low.”

The commission was generally of the view that it made sense for the NBN to be the single fixed-line network operator for the majority of Australia, and that allowing more infrastructure-based competition to the NBN was unlikely to produce results.

“Economic and technical barriers to entry generally prevent multiple network providers from operating in the same service area and competing at a wholesale level,” the commission said.