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National Access Regime (2013)

Inquiry report

This report was released on 10 February 2014. The report analyses the objectives for access regulation, the effectiveness of the Regime in meeting its objectives and the potential reform options.

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  • Key points
  • Contents
  • The National Access Regime should be retained.
    • Access regulation can address an enduring lack of effective competition, due to natural monopoly, in markets for infrastructure services where access is required for third parties to compete effectively in dependent markets. This is the only economic problem access regulation should address.
    • The scope of the Regime should be confined to ensure its use is limited to the exceptional cases where the benefits arising from increased competition in dependent markets are likely to outweigh the costs of regulated third party access to infrastructure services. Proposed changes to the declaration criteria seek to achieve this outcome.
    • Robust institutional arrangements, including an avenue to limited merits review, should ensure that access regulation is judiciously applied.
  • When considering whether to regulate access to infrastructure services in the future, governments should seek to demonstrate that there is a lack of effective competition in the market for the service that is best addressed by access regulation. An assessment of the net benefits should determine whether access regulation is most appropriately applied at the facility or industry level.
    • Facility based arrangements impose net costs if they are incorrectly applied, and provide incentives for lobbying. Such arrangements should be limited to where there is a clear net benefit from tailoring access regimes for a specific facility.
    • Further industry specific regimes should apply only where there is sufficient similarity between infrastructure services within the industry and where the industry has features that justify different regulatory treatment from that offered by the generic National Access Regime.
    • Caution should be exercised before mandatory undertakings are implemented in the future. Where mandatory undertakings are used, they should be subject to upfront and ongoing assessment to ensure they are used to target the economic problem. Safeguards for the provider and other existing users of the service should be consistent with those for declared services.
  • There is an economic rationale for the Australian Competition and Consumer Commission's (ACCC's) power to direct infrastructure extensions in an access determination but, due to the practical difficulties of directing extensions, it is likely that the benefits of using the power would rarely outweigh the costs.
    • Part IIIA should be amended to confirm that the ACCC's legislative power to direct extensions also encompasses capacity expansions. This will ensure that the safeguards set out in the legislation will also apply to directed expansions.
    • Following a public consultation process, the ACCC should develop guidelines outlining how it would exercise its legislative power to direct extensions such that it would be expected to generate net benefits to the community. The preparation of the guidelines should include an analysis of the workability and adequacy of the provision to direct extensions and its safeguards.
    • The safeguards should not be construed such that a service provider could be required to pay the upfront costs of the directed extension or capacity expansion.

Background information

Anna Heaney (Assistant Commissioner) 03 9653 2153

  • Preliminaries
    • Cover, Copyright and publication detail, Transmittal letter, Terms of reference, Contents and Abbreviations
  • Overview
  • Recommendations
  • Chapter 1 Introduction
    • 1.1 The scope of the inquiry
    • 1.2 The importance of infrastructure
    • 1.3 The Commission's approach
    • 1.4 The inquiry process
  • Chapter 2 What is the National Access Regime?
    • 2.1 Introduction
    • 2.2 The National Access Regime in practice
    • 2.3 Part IV of the CCA
  • Chapter 3 Why do we need access regulation?
    • 3.1 The economic problem
    • 3.2 What policy tools could address the economic problem?
    • 3.3 The Regime's economic efficiency objective
    • 3.4 Potential economic effects of access regulation
  • Chapter 4 The declaration, negotiation and arbitration process
    • 4.1 The decision to declare
    • 4.2 The negotiate-arbitrate framework
    • 4.3 Should the negotiate-arbitrate framework be retained?
    • 4.4 Directions to extend and expand facilities
    • 4.5 Other arbitration powers and responsibilities
  • Chapter 5 Declaration criteria
    • 5.1 Definition of a service
    • 5.2 Declaration criteria
    • 5.3 Criterion (b) - the uneconomical to develop another facility test
    • 5.4 Criterion (a) - the competition test
    • 5.5 Criterion (c) - the national significance test
    • 5.6 Criterion (f) - the public interest test
  • Chapter 6 Certification and undertakings
    • 6.1 Certification
    • 6.2 Undertakings and access codes
  • Chapter 7 Is the National Access Regime achieving its objectives?
    • 7.1 The Commission's approach
    • 7.2 The effect of declaration on the efficient operation and use of infrastructure
    • 7.3 The effect of declaration on investment
    • 7.4 Administrative, compliance and other costs of declaration
    • 7.5 The National Access Regime as an overarching framework
    • 7.6 The Commission's assessment
  • Chapter 8 Reforming the National Access Regime
    • 8.1 A package of reforms
    • 8.2 Targeting the declaration criteria at the economic problem
    • 8.3 Improving certification arrangements
    • 8.4 Ensuring undertakings are used to target the economic problem
    • 8.5 Safeguards should apply to directed expansions
    • 8.6 Facilitating efficient investment in infrastructure
    • 8.7 The balance between Part IIIA and industry-specific access regimes
    • 8.8 Facility-based access regulation
  • Chapter 9 Institutional arrangements
    • 9.1 Are there too many institutions and steps?
    • 9.2 The National Competition Council
    • 9.3 The role of ministers
    • 9.4 The role of the Australian Competition and Consumer Commission
    • 9.5 Review of decisions made under Part IIIA
  • Chapter 10 The broader policy context
    • 10.1 The Competition and Infrastructure Reform Agreement
    • 10.2 Private sector provision of infrastructure services
    • 10.3 Further review of the Regime
  • Appendix A Conduct of the inquiry
  • References

Printed copies

Printed copies of this report can be purchased from Canprint Communications.

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