Telecommunications Act 1997 Parts 7 and 8 requirements and exemptions

The requirements established by Parts 7 and 8 of the Telecommunications Act 1997 apply to:

a fixed-line local access network or part of a fixed-line local access network that's built, upgraded, altered or extended to residential or small business users after 1 January 2011, with a usual download speed of more than 25 megabits per second (known as 'superfast' services).

Wholesale Layer 2 bitstream services

The Australian Competition and Consumer Commission (ACCC) regulates the provision of Layer 2 bitstream services to ensure that these services are offered on an open and equivalent access basis.

Prior to 26 May 2020, wholesale Layer 2 bitstream services were regulated by Part 7 of the Telecommunications Act 1997. The Telecommunications Legislation Amendment (Competition and Consumer) Act 2020 (TLA Act) repealed Part 7 and associated provisions of the Competition and Consumer Act 2010 (CCA).

Importantly, even though Part 7 has been repealed, relevant ACCC declarations and access determinations (set out below) remain in force.

The ACCC has declared a layer 2-bitstream service. This service is called the local bitstream access service (LBAS). The ACCC declared the LBAS in February 2012, and subsequently made a final access determination for the LBAS declaration. For more details on these decisions, see the links below.

On 29 July 2016, the ACCC also declared the Superfast Broadband Access Service (SBAS), which is a superfast layer 2 bitstream service, or in the case of Telstra, a Fibre Access Broadband Service. The SBAS applies to a number of specific types of network controllers, including those that were exempted from Part 7, meaning the LBAS did not apply to them. More information on the ACCC SBAS declaration and associated Access Determination can be found at the links below:

The TLA Act provides for existing exemption instruments that had been granted under Part 7 of the Act to continue to have effect, and preserves the power for the instruments to be varied by the Minister. This ensures that relevant networks continue to be regulated by either the LBAS or SBAS as previously envisaged. However, the Minister cannot make a new exemption instrument from 26 May 2020.

The wholesale-only requirement (Part 8)

As a general rule, Part 8 requires fixed-line superfast capable lines servicing residential customers to be wholesale only. However, from 25 August 2020:

networks servicing predominantly small business areas will no longer be subject to the separation rules
lines and networks that would otherwise be subject to structural separation requirements will be able to operate on a functionally separated basis subject to the approval of the Australian Competition and Consumer Commission (ACCC); and
the ACCC will be able to make class exemptions for small providers (up to 2,000 services, which could be raised by regulation to 12,000).

Class exemption from the separation requirements in the Telecommunications Act 1997

The carrier separation requirements in Part 8 of the Telecommunications Act 1997 require providers of superfast broadband services to be either structurally or functionally separated. The TLA Act amended the Telecommunications Act 1997 to give the ACCC the power to allow a class exemption for providers with up to 2,000 customers or up to 12,000 customers should regulations allow.

On 25 August 2020, the ACCC granted a class exemption for providers with up to 2,000 customers through the Telecommunications (Superfast Broadband Network Class Exemption) Determination 2020. The ACCC decision also provided for any regulated increase of the limit up to 12,000 customers to automatically apply.

Subsequently to a public consultation process, the Government made the Telecommunications Amendment (Local Access Lines—Class Exemptions) Regulations 2022, which, effective from 5 March 2022, increased the customer limit for the class exemption to 12,000.