The federal government has issued a draft licence condition designed to protect the NBN from cherry-picking from carriers such as TPG.
The licence condition would require any carrier offering wireline broadband services in competition with NBN Co to offer them to competitors on a wholesale basis and at the same price as NBN Co. The draft stipulates that such carriers would have to offer a Layer 2 access service, providing speeds of 25 Mbps downstream and 5 Mbps upstream for $27 per port per month– the same as NBN Co’s current Access Virtual Circuit (AVC) charge.
Perhaps more troublesome for NBN Co’s potential competitors is the requirement that they be functionally separated. Functional separation would involve organising wholesale and retail functions into two completely separate companies with their own management structures and, most significantly, their own operating systems.
Such duplication would impose significant costs and potentially change the whole business case of a company such as TPG.
The government is giving industry until 14 November to comment on the proposal.