Regulating Access to Essential Facilities

Abstract

It introduced Competition is now six the Policy. years comprehensive since Those Australia's six reforms years State have which and left jointly Commonwealth few constituted sectors of Governments the the economy National introduced the comprehensive reforms which jointly constituted the National Competition Policy. Those six years have left few sectors of the economy unaffected, and have fundamentally changed the nature and philosophy of competition regulation. Traditional monopolies have been most affected by these changes. While other elements of the National Competition Policy reinforced existing structures in areas such as consumer protection and trade practices, market liberalisation in areas dominated by traditional monopolies was a new phenomenon. As in Europe and a number of other jurisdictions, removing legislative barriers to entry to those markets and regulating access to the essential facilities which delivered the services were the main mechanisms by which this was to be achieved. Australia's energy, transport and telecommunications markets now operate very differently from the way they did six years ago. The extent and nature of those changes are different in each case. At the same time, the regulations that made them possible are under review by the Productivity Commission, which is currently conducting investigations into both the generic and telecommunicationsspecific access regimes. The Commission released its drafts in March 2001 and will report its findings to the Treasurer at around the time this article goes to press. This paper outlines the access provisions which now operate in Australia, summarises our experience in implementing them over the last six years, and looks at some of the issues which have emerged as a result of this experience. In particular, issues relating to investment have been prominent in the public debate surrounding the Productivity Commission's inquiry.