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Communications market reportDecember 202420232024iiACCC|Communications market report|20232024Acknowledgment of countryThe ACCC acknowledges the traditional owners and custodians of Country throughout Australia and recognises their continuing connection to the land,sea and community.We pay our respects tothem and their cultures;and to their Elders past,present and future.Australian Competition and Consumer Commission Land of the Ngunnawal people 23 Marcus Clarke Street,Canberra,Australian Capital Territory,2601 Commonwealth of Australia 2024This work is copyright.In addition to any use permitted under the Copyright Act 1968,all material contained within this work is provided under a Creative Commons Attribution 4.0 Australia licence,with the exception of:the Commonwealth Coat of Arms the ACCC and AER logos any illustration,diagram,photograph or graphic over which the Australian Competition and Consumer Commission does not hold copyright,but which may be part of or contained within this publication.The details of the relevant licence conditions are available on the Creative Commons website,as is the full legal code for the CC BY 4.0 AU licence.Requests and inquiries concerning reproduction and rights should be addressed to the Director,Corporate Communications,ACCC,GPOBox 3131,Canberra ACT 2601.Important notice The information in this publication is for general guidance only.It does not constitute legal or other professional advice,and should not be relied on as a statement of the law in any jurisdiction.Because it is intended only as a general guide,it may contain generalisations.You should obtain professional advice if you have any specific concern.The ACCC has made every reasonable effort to provide current and accurate information,but it does not make any guarantees regarding the accuracy,currency or completeness of that information.Parties who wish to re-publish or otherwise use the information in this publication must check this information for currency and accuracy prior to publication.This should be done prior to each publication edition,as ACCC guidance and relevant transitional legislation frequently change.Any queries parties have should be addressed to the Director,Corporate Communications,ACCC,GPO Box 3131,Canberra ACT 2601.ACCC 12/24_2484www.accc.gov.auiiiACCC|Communications market report|20232024ContentsList of acronyms ivAnnual advertised price changes in telecommunications services in Australia vExecutive Summary 21.Introduction 82.Key market developments 92.1 New NBN regulatory settings drive changes 92.2 Sustained price increases in the mobile market 132.3 Technological and other developments in mobile infrastructure 143.Pricing and consumer trends 193.1 Retail NBN fixed broadband services 193.2 Retail non-NBN services 253.3 Fixed voice services 313.4 Retail mobile phone 333.5 Retail mobile broadband 384.ACCC activities 414.1 Regulated access to telecommunications 414.2 Carrier separation rules 444.3 Telecommunications complaints data 464.4 Enforcement,compliance,mergers and authorisations 484.5 Monitoring and reporting 494.6 Advice,advocacy and consumer education 514.7 Telstras Structural Separation Undertaking and Migration Plan 555.Appendix 565.1 Pricing data tables 56ivACCC|Communications market report|20232024List of acronymsACCCAustralian Competition and Consumer CommissionACMAAustralian Communications and Media AuthorityADSLasynchronous digital subscriber lineCCACompetition and Consumer Act 2010(Cth)CPIConsumer Price IndexCVCconnectivity virtual circuitDSLdigital subscriber lineGBgigabyteGHzgigahertzHFC hybrid fibre coaxialLEOlow-Earth orbitMbpsmegabits per secondMOCNMulti-Operator Core NetworkNBNNational Broadband NetworkSAUSpecial Access UndertakingSMSshort messaging servicesWBAWholesale Broadband Agreement3Gthird generation4Gfourth generation5Gfifth generationvACCC|Communications market report|20232024Annual advertised price changes in telecommunications services in AustraliaJune 2024 advertised prices collected by the ACCC from retailers websites(during mid-2024)compared with June 2023 advertised prices,showing the nominal monthly advertised price excluding discounts for:25th percentile(low-range price,where 25%of plans sampled are below this price)median(mid-range price,where this figure is middle value of our data set)75th percentile(high-range price,where 75%of plans sampled are below this price).NBN fixed broadband all plansLow-range priceDownload speedMid-range priceHigh-range price$5115.4.2%$5513.3%$6512 Mbps$650.1%$6910.6%$7125 Mbps$75$80$8450 Mbps$855.6%$908.9%$95100/20 Mbps$9010.2%$1007.1%$105100/40 Mbps$10013.0%$1108.5%$119250 Mbps1.4%flatflat9.9%8.3.0%1.2%NBN fixed broadband standard set of comparable products,2023 to 2024 Download speed$5.3312 Mbps25 Mbps50 Mbps100/20 Mbps100/40 Mbps250 Mbps$0.64$3.19$3.08$6.97$12.99viACCC|Communications market report|20232024Non-NBN fixed broadbandLow-range priceDownload speedMid-range priceHigh-range price$580.1%2.6%$600.4%$6112 Mbps$643.4%$695.3%$7125 Mbps$72$80$8950 Mbps$894.1%$900.8%$101100/20 Mbps$8911.0%$1002.7%$107100/40 Mbps$9915.4%$1105.5%$129250 Mbps1.4%9.1%4.8%8.3%3.4%flat5.7%Mobile phoneLow-range priceBrandMid-range priceHigh-range price$455.2%$551.5%$67$2513.3%$31flat$40$25flat$3422.5%$49Mobile network operator flagshipMobile network operator sub-brandsMobile virtual network operator 12.5%.0%.0%Mobile broadbandLow-range pricePlanMid-range priceHigh-range price$22$40$58All samples14.3.0.0vertised price approach to price monitoringThe ACCCs analysis uses advertised pricing from the month of June to estimate prices for telecommunications products.The data on market offers is drawn annually from Critical Information Summaries,which retailers publish on their websites.This means that the prices for legacy plans that customers may still be on are not considered.Prices used in the analysis are the ongoing price and do not include temporary discounts.Unless otherwise stated,pricing analysis does not take into account changes in product features,such as data allowances or other inclusions.The broadband analysis in this report considers speed tiers and the network technology as major price differentiating factors.The mobiles analysis considers service provider type as the major pricing factor.1ACCC|Communications market report|20232024Key market developments New NBN regulatory settings coming into effectChanges to mobile and satellite infrastructure may improve competitionKey ACCC projectsOctober 2023Final decisionProposed variation to the NBN Co Special Access UndertakingAcceptance of the Special Access Undertaking and implementation commences Public inquiry into the declaration of the d omestic transmission capacity service and fixed line services Final report March 2024 Combined declaration inquiry continues towards access determinations Land of the Ngunnawal people 23 Marcus Clarke Street Canberra ACT 2601 GPO Box 3131 Canberra ACT 2601 Tel 02 6243 1111 Fax 02 6243 1199 www.accc.gov.au Our ref:IM-72639 12 July 2024 Dear Interested Party,Re:ACCC seeking your views:Optus and TPGs proposed network and spectrum sharing in regional Australia The Australian Competition and Consumer Commission(ACCC)is seeking your views on the proposed network and spectrum sharing arrangement in regional Australia by Optus Mobile Pty Ltd(Optus)and TPG Telecom Limited(TPG)(the Parties).The Parties have entered into three interrelated agreements in respect of a Multi-Operator Core Network(MOCN)commercial arrangement:a MOCN Services Agreement,a Spectrum Authorisation Agreement and a Site Transfer Agreement(the Proposed Arrangement)(see Attachment A for further detail).The MOCN Services Agreement is for a period of 11 years,with a five-year option for TPG to extend the term.The legal test the ACCC applies when assessing mergers and acquisitions is in section 50 of the Competition and Consumer Act 2010(Cth)(the CCA).Section 50 prohibits acquisitions that would have or are likely to have the effect of substantially lessening competition in a market.The Parties have sought clearance by the ACCC of two acquisitions that are integral to the Proposed Arrangement:a)an authorisation by TPG for Optus to use certain TPG spectrum in defined regional areas in the 700 MHz,1800 MHz,3600 MHz and 3700 MHz bands,which is deemed by s 68A of the Radiocommunications Act 1992(Cth)to be an acquisition for the purposes of s 50 of the CCA,and b)the transfer to Optus by TPG of certain leases and/or licences over,and equipment attached to,a number of regional mobile network sites,in the defined regional areas to be used for the MOCN Assessment of the Optus and TPG Telecom regional network sharing arrangement Superfast broadband access service access determination inquiry Final decision March 2024 Superfast Broadband Access Service access determination finalised and amendments to the Deemed Functional Separation UndertakingTwenty-sixth Report,September 2024 The Measuring Broadband Australia program provides information on the real-world performance of broadband plans.The program aims to better understand how Australians are experiencing internet performance in their homes,provide Australian consumers with accurate and independent information about broadband performance to assist their purchasing decisions,and encourage greater performance-based competition and better internet performance.These reports are prepared quarterly by SamKnows,an independent testing provider appointed by the Australian Competition and Consumer Commission(ACCC).The Measuring Broadband Australia broadband retailers are continuing to deliver download speeds to consumers that are close to their maximum plan speed2ACCC|Communications market report|20232024Executive SummaryThis is the ACCCs annual report on Australian telecommunications markets for 202324.The report includes an overview of key market developments and identifies trends and emerging issues.It also assesses the changes in prices paid by consumers(using prices advertised by retailers as a measure)for telecommunications services and examines competitive safeguards within the telecommunications industry.NBN Cos new Special Access Undertaking,which sets out new regulatory settings for the National Broadband Network(NBN),is now in effect and resulting in changes across the wholesale and retail sectors for broadband.The ACCCs recent declaration inquiry into whether wholesale services should be declared has also brought about some changes at the wholesale level,with the unconditioned local loop service and line sharing service declarations being allowed to expire on 30 June 2024.Optus and TPG Telecom entered into a series of regional network sharing agreements,resulting in Optus having access to TPG Telecoms spectrum and being able to roll out its 5G coverage in more areas,while TPG Telecoms customers will have access to the Optus network in regional areas.There are also technological developments occurring,particularly in the low-Earth orbit satellite space,which have the potential to provide greater infrastructure competition,particularly in regional and remote areas.With consumers increasingly having alternative options for their telecommunications services,it remains as important as ever for consumers to review their usage and to shop around for services that suit their needs and price point.New regulatory settings for the NBN drives change in the wholesale and retail market NBN Cos varied Special Access Undertaking commenced in October 2023,following NBNCo further revising its proposal to obtain ACCC acceptance.The new Undertaking includes measures designed to protect consumers from sharp price rises,reduce barriers to entry for retailers and improve quality of services supplied over the NBN.It also provides a long-term price path towards efficient cost recovery.Following acceptance of the varied undertaking,NBN Co and its retailers entered into a new 3-year wholesale agreement,which implements a number of important pricing and other initiatives consistent with the new regulatory settings.These include:An initial rebalancing of the costs to acquire residential grade Ethernet broadband access services whereby the cost of the 50 Mbps speed tier increased,and the cost of higher speed tiers decreased.The introduction of a new low-cost access offer to support the supply of voice and voice-band data services,and designating the 25 Mbps speed tier as the entry level broadband access product.Setting a short timetable for completely removing volume-based charges from residential grade connectivity virtual circuits(CVC),to boost cost certainty for retailers.These charges were reset to zero for 100 Mbps and higher speed tiers and are being progressively reduced to zero for other speed tiers by 1 July 2026.3ACCC|Communications market report|20232024Enhanced consultation requirements for NBN Co with retailers and end-users,aimed at identifying efficient measures to improve service quality and to consider the views of low income and digitally excluded end-users in product and pricing decisions.Connectivity Virtual Circuit(CVC)is a virtual circuit that carries an access seekers aggregated customer traffic over the NBN.If an access seeker does not purchase sufficient CVC capacity,their customers service speed can degrade,especially during busy evening hours.A number of changes in the wholesale market have followed these regulatory and commercial developments,including:An increase in the number of wholesale access services that smaller and emerging retailers directly acquire from NBN Co,with over 1.67 million services acquired by smaller and emerging access seekers in June 2024,compared to 1.46 million in September 2023.A significant step up in the CVC capacity acquired by retailers,from around 3 Mbps per user in September 2023 to 6 Mbps per user in June 2024.This capacity is a key mitigation of the risk of network congestion and poor experience for end-customers in the busy evening hours.The large step up in CVC capacity also led to the NBN average network bandwidth congestion minutes falling to extremely low levels(see section 2.1.2 below).A shift in the mix of wholesale speed tiers to better align with speed tier demand in the retail market.As a consequence of these market changes,the amount of CVC capacity purchased has grown significantly more than utilised capacity.This has contributed to a reduction in average network congestion on the NBN.Optus and TPG Telecom enter into regional network sharing arrangement,but the ACCC will continue to monitor the mobiles marketIn April 2024,Optus and TPG Telecom announced 3 interrelated agreements regarding provision of mobile services in regional coverage areas.As part of these agreements,Optus will use certain TPG Telecom spectrum in regional areas to supply mobile services.In exchange,Optus will provide TPG Telecom and its customers with network services in those areas.TPG Telecom will transfer some of its mobile tower sites to Optus,while it will decommission others in areas serviced by the Optus network.Optus will be able to access TPG Telecoms low-band and mid-band spectrum in regional areas as part of the agreement.This will enable Optus to provide additional capacity and coverage in regional areas and accelerate its 5G network rollout.The ACCC did not oppose the proposed agreements on the basis that they are not likely to result in a substantial lessening of competition in affected markets,including the retail and wholesale mobiles markets.However,sustained price increases by mobile network operators over the past couple of years and Telstras enduring market share dominance in regional,rural and remote areas are of concern to the ACCC.4ACCC|Communications market report|20232024The industry is experiencing numerous changes,with emerging technologies having the potential to disrupt the market and enable Optus and TPG Telecom to market their services to areas previously only served by Telstra.As such,the ACCC will continue to monitor changes to mobile prices,market shares and investments going forward.New satellite entrants increasing prospect of infrastructure competitionLow-Earth orbit(LEO)satellites are those that circle around the Earth at much lower altitudes(around 160 km to 2,000 km)than other satellites.A constellation of LEO satellites is required to provide continuous coverage of an area or for full coverage of Earth.Developments in LEO satellites continued throughout 202324.This technology allows for higher data speeds and lower latency than geostationary satellites and has the potential to be a cheaper alternative to providing mobile coverage in regional and remove areas compared with terrestrial networks.Some notable developments during the year included:Telstra announced it is exploring direct-to-handset capability via LEO satellites supplied by Lynk Global.Telstra also began retailing Starlink fixed voice and broadband internet services.1TPG Telecom announced a partnership with Lynk Global for direct-to-handset services.2Optus originally planned to launch direct-to-handset services in late 2024(initially SMS only)after announcing a partnership with SpaceX in July 2023,but this has since been delayed.3Amazon announced Australia as one of the first countries in which it will trial its Project Kuiper LEO statellite service,with commercial services expected to launch in mid-2025.4Improved broadband speed performance observed,with additional transparency being established for service quality indicatorsThe Measuring Broadband Australia program observed new highs for download performance on NBNs fixed line and fixed wireless networks during this year.Changes in NBN Cos wholesale pricing and products led to further boosts in the key speed metrics for services supplied over the NBN,with busy hour speeds on NBN Cos very high speed services,5 and the maximum speeds achievable on its Fixed Wireless Plus plan recording the strongest gains.6 The average busy hour download speed across all NBN fixed line services was the highest in the programs history at 99.8%of plan 1 V Brady,Telstra announces organisational changes and action on cost;Provides early FY25 guidance and reaffirms FY24 guidance Transcript,Telstra,21 May 2024,accessed 16 October 2024.2 M Gabaji,TPG strikes satellite deal to erase mobile dead zones a rural rescue or Optus rivalry?,Finder,28 August 2024,accessed 16 October 2024 3 Optus,Together Optus and SpaceX Plan to Cover 100%of Australia,12 July 2023,accessed 16 October 2024.4 Amazon,Better Delivery of Universal Services Discussion Paper Amazon Project Kuipers response,1 March 2024,accessed 16 October 2024.5 ACCC,Measuring Broadband Australia Report 24 March 2024,27 March 2024,accessed 31 October 2024.6 ACCC,Measuring Broadband Australia Report 25 June 2024,26 June 2024,accessed 31 October 2024.5ACCC|Communications market report|20232024speeds in June 2024,following consistent quarterly increases from previous highs throughout the year.7 Consistent with these results,the number of average network bandwidth congestion minutes reported by NBN Co reduced significantly.8In addition,the proportion of underperforming services continued to decline.These are services which do not come close to achieving the headline speeds for the chosen plan at any time of the day,due to limitations on the end-customer connection.By the end of June 2024 these accounted for 4.1%of NBN fixed line services monitored by the Measuring Broadband Australia program.Importantly,increasing numbers of impacted consumers can now achieve the full speed of their chosen plan without incurring an upfront cost or commit to a higher cost plan.This is due to NBN Co modifying its fibre upgrade offers for impacted consumers within the relevant footprint.Previously impacted consumers could only downsize their retail plan to better align with the capability of their connection.The overall success of this initiative relies on competition in the retail market to raise consumer awareness and drive retailers and consequently NBN Co to migrate consumers efficiently onto upgraded network connections.Under the varied Special Access Undertaking,NBN Co has engaged with access seekers and consumer groups around potential service improvements relating to the delivery of connections,fault rectification,speed assurance,network performance and availability,in addition to efforts to improve attainable speeds and service stability via its network upgrade programs.These enhanced consultation initiatives were created so that NBN Co could better target its service improvements throughout the initial regulatory cycle,as well as propose new benchmark service standards to apply in the next cycle,which is due to commence in July 2026.The ACCCs new service quality and network performance record keeping rule for NBN Co,published in April 2024 and taking effect from 1 July 2024,will further improve transparency and accountability relating to the quality of services supplied over the NBN,and where there may be gaps between real world experience and expectations of end customers.9Smaller NBN retailers continue to make inroads in NBN servicesTelstra(35%),TPG Telecom(20%)and Optus(12%)continue to hold the largest market shares of NBN retailers the ACCC captures in its Internet Activity reporting.However,smaller retail service providers have gradually expanded over the past few years Aussie Broadband has grown to 7%of the NBN retail market(up from 6%2 years ago)and Superloop has now reached 4%of the market.Changes to how NBN retailers bundle products they offer resulted in a reduction in average advertised prices for new customers across all speed tiers in 202324(for example,previously bundled inclusions are now presented as add on products,reducing the cost of the baseline offering).However,ACCC analysis of a subset of advertised plans offered by the major retailers available in both 2023 and 2024 demonstrated that average advertised prices for 12 Mbps,25 Mbps and 50 Mbps product offerings increased in 202324,while prices for the 100 Mbps and above tiers decreased.Retail NBN offers at the 50 Mbps speed tier remained the most popular,despite pricing and other incentives provided to retailers and consumers to shift towards more expensive offers.After weighting advertised prices according to the number of each retailers reported customers on each speed tier,ACCC analysis showed that,on average,customers on a 50Mbps plan are likely to 7 ACCC,Measuring Broadband Australia Report 25 June 2024,26 June 2024,accessed 31 October 2024.8 NBN Co,Monthly Progress Report,June 2024,accessed 31 October 2024.9 ACCC,NBN service quality and network performance record keeping rule,5 April 2024,accessed 27 November 2024.6ACCC|Communications market report|20232024be paying around$88 per month,significantly above the unweighted average advertised plan price of$80.Speed is not the only consideration consumers make when selecting their NBN retail service provider.Consumers can also consider the overall value of the product offering,by taking into account things like customer service and add on products.The ACCCs analysis suggests that,like many essential services sectors the ACCC examines,there are likely to be some customers who would benefit from periodically shopping around to determine the best value,most suitable NBN retail offering for their needs.Home wireless broadband popularity growingHome wireless broadband is a type of fixed wireless service,delivered over existing mobile networks.Consumer uptake of home wireless broadband,which is delivered over mobile networks,has increased by 60%since 2022 and now accounts for 58%of non-NBN services in operation,and 6.6%of all broadband services,reported under the Internet Activity record keeping rule(up from 45%and 4.2%respectively since June 2022).It has become an attractive broadband option for consumers that can access it,with mobile network operators marketing it as an alternative to NBN and other fixed line broadband.Home wireless broadbands popularity has grown.It is comparable in price,speed and data allowances relative to fixed broadband plans and it can be a very effective substitute for fixed line broadband for some.However,it is important to note that home wireless broadband is not available to all consumers.Its availability is determined by the location of mobile network towers,which may not provide suitable coverage in regional and remote areas.Further,the service can be subject to varied speeds,depending on tower capacity and whether it has 4G or 5G coverage.Prices for mobile network operators flagship plans continue to rise,with the number of pre-paid service offerings fallingAdvertised prices of the mobile network operators flagship brand post and pre-paid plans increased in 202324,following trends from recent years.Despite recent increases in pre-paid mobile subscribers,the number of pre-paid plans offered by the mobile network operators flagship brands(Telstra,Optus and Vodafone)decreased,suggesting the mobile network operators are moving towards a consolidated number of service offerings.This reduction in offerings caused a mild reduction in the median advertised price for the mobile network operators flagship brands.Despite this decline,the median advertised prices for the mobile network operators flagship brands remain significantly higher than those of its sub-brands(e.g.Belong and Amaysim)and mobile virtual network operators.Our analysis suggests that consumers continue to not use a significant portion of their data allowances under their mobile plans.We estimate that the average advertised data allowance for mobile plans(pre-paid and post-paid)was around 68 GB per month,but that consumers are only using around 14.2 GB per month,or only around 20%of the average montly allowance.7ACCC|Communications market report|20232024This suggests that consumers may benefit from exploring other plans that are available,at lower price points,with less data included,or both,to obtain better value in their mobile plans.However,consumers should check mobile coverage of any potential provider to ensure it suits their needs.The ACCCs combined declaration inquiry examined whether wholesale services should continue to be regulatedThroughout 202324,the ACCC conducted a combined declaration inquiry into whether 9wholesale telecommunications services should continue to be regulated.The inquiry considered whether ongoing regulation of these services would promote the long-term interests of end-users and if any changes to these regulations are appropriate.The ACCCs final positions were to:Extend the declaration of the domestic transmission capacity service for a further 5years and vary the service description to reflect technological changes since the last declaration inquiry.Extend the declarations of the resale fixed line services(local carriage service,wholesale line rental and wholesale asymmetric digital subscriber line)for a further 5years without changes to the service descriptions.Extend the declarations of the fixed originating and terminating access services for a further 5 years and vary the service descriptions to reflect the industry trends towards IP-based interconnection.Extend the declaration of the mobile terminating access service for a further 5 years with no amendments to the service description.Allow the declarations of the unconditioned local loop and line sharing services to expire without making a new declaration.We considered that declaration of the unconditioned local loop service and line sharing service is no longer necessary to promote the long-term interests of end-users.This is due to the very low number of services in operation and the availability of services such as wholesale Asymmetric Digital Subscriber Line(ADSL)and the resale fixed voice services,which access seekers can use to provide plain old telephone services and ADSL services to end-users over Telstras customer access network.The ACCC has commenced 3 separate final access determination inquiries to consider price and non-price terms and conditions of the 7 services that remain declared following the combined declarations inquiry.This work will continue throughout 202425.8ACCC|Communications market report|202320241.IntroductionThe Australian Competition and Consumer Commission(ACCC)releases the Communications market report every year.The report details recent competitive safeguard activities in the Australian telecommunications industry and the prices paid by consumers for telecommunications services,as required by the Competition and Consumer Act 2010(CCA).As discussed above,the ACCC uses advertised pricing from the month of June to estimate prices for telecommunications products.The ACCC has a broad role in the Australian telecommunications sector,including competition and access functions,responsibilities relating to the NBN,monitoring and reporting,and compliance work under the CCA and other telecommunications-specific legislation.The structure of this report is as follows:Chapter 2 highlights the key developments from the last year that have influenced both the markets and the ACCCs work in communications.Chapter 3 sets out retail pricing and consumer trends for the 202324 financial year.Chapter 4 reviews the ACCCs engagement in the telecommunications sector in 202324 and outlines ACCC actions that have been taken to safeguard both competition and consumers.Telecommunications,as an essential service,remains an ACCC compliance and enforcement priority.9ACCC|Communications market report|202320242.Key market developments2.1 New NBN regulatory settings drive changesNBN Cos SAU provides the overarching framework for NBN regulation.However,the full contractual terms under which NBN Co provides wholesale services to its customers(i.e.retailers and other access seekers)are set out in a commercial agreement between NBN Co and these customers,known as the Wholesale Broadband Agreement.In October 2023 the ACCC accepted NBN Cos latest variation to its Special Access Undertaking(SAU),which includes measures designed to protect consumers from sharp price rises,reduce barriers to entry for new retailers and create incentives to fix systemic issues that drive poor NBN consumer experience.The SAU sets the rules for how broadband providers will access the NBN over the coming decades and will apply until 2040.The SAU led to the adoption of a new Wholesale Broadband Agreement(known as WBA5)between NBN Co and retail service providers,which commenced on 1December 2023.It is a 3-year agreement that introduced several improvements for retail service providers and customers.2.1.1 NBN wholesale price changes under WBA5The new Wholesale Broadband Agreement introduced the following wholesale price changes:a new basic voice and data usage service at around half the price of NBN Cos previous entry-level broadband offer(reduced in price from$22.50 to$12 per month)lower prices for the 25 Mbps and the 100 Mbps or faster speed tier offers an increase of$5 per month in the minimum price of the 50 Mbps offerthe removal of capacity-based charging on higher speed services.The revised SAU allows NBN Co to gradually increase its wholesale pricing until its annual revenues reach its efficient costs of supply,expected in 2030.This is on the condition that its weighted average access price does not increase by more than CPI each year and that no individual residential grade access price increases by the higher of CPI or 5%per annum.10 NBN Cos most recent wholesale price changes announced on 1 May 2024 to apply for 202425 are within the maximum increases allowed under the SAU.The lower speed services(50 Mbps and less)increased by close to the maximum individual price cap allowances.However,higher speed services(100 Mbps or more)increased by less than permitted and in some cases fell substantially from the maximum prices that applied in 202324.Prices for many other wholesale access services offered by NBN Co,including business,satellite,network interface and miscellaneous installation,activation and service charges,will not change.10 NBN Cos residential Entry Level Offers cannot increase by more than the CPI.10ACCC|Communications market report|20232024The average wholesale price paid by retailers to access the NBN to supply households,measured by NBN Cos average revenue per residential user,remained about the same between 202223 and 202324 at$47 per month.11 However,because retailers purchase a different mix of wholesale services,they will have experienced different changes in their costs of accessing the NBN.This mix is expected to have contributed to the different retail pricing changes across retailers and influences retail competition.More specifically,there is evidence of increased sale of,and competition in the supply of,higher speed retail services due to the reduction in the wholesale price of these services.This is discussed further in Chapter 3 below.2.1.2 Removal of some capacity charges has changed retailers wholesale strategiesConnectivity Virtual Circuit(CVC)is a virtual circuit that carries an access seekers aggregated customer traffic over the NBN.If an access seeker does not purchase sufficient CVC capacity,their customers service speed can degrade,especially during busy evening hours.Under the new WBA5 pricing structure,volume-based capacity charges(known as“CVC”)were removed from 100 Mbps and higher offers from 1 December 2023.NBN Co will progressively reduce CVC capacity charges on 50 Mbps and below offers each year,prior to withdrawing them completely from mid-2026.This change has significantly altered retailers CVC capacity acquisition strategies.Prior to WBA5,retailers acquired CVC to optimise their costs,having regard to expected customer utilisation and their marketing claims.However,WBA5 pricing significantly reduces the incentive for retailers to minimise CVC acquisition and potentially risk busy hour congestion on their networks.This is due to the removal of CVC charges from higher speed services(100 Mbps and above),and additional measures to boost cost certainty for retailers when acquiring other speed services,pending CVC charges being removed more widely by 1 July 2026.Figure 1 below shows that NBN traffic class 4 fixed line and fixed wireless CVC provisioning per service now significantly exceeds the amount of CVC utilised per service following the change in NBN Cos wholesale pricing model.Busy hour CVC utilised per service has grown fairly constantly at between 8%and 13%over the past 3 years.This reflects improvements in data efficiency of applications used in peak hours,notably streaming services.Some of the reduction in the rate of growth reported by NBN Co in FY24 is likely due to the change in the basis of measurement and should be regarded as an estimate only.The significantly higher growth in CVC provisioned compared to the growth in busy hour CVC utilisation in FY24 has also contributed to the number of average network bandwidth congestion minutes reported by NBN Co,falling to extremely low levels since the introduction of WBA5(see Figure 2 below).11 NBN Co,FY24 Financial Results presentation,13 August 2024,p 11,accessed 31 October 2024.11ACCC|Communications market report|20232024Figure 1:NBN CVC provisioned and CVC busy hour utilisation per service in operationMbps per service in operation01234567Jun21Jun22Jun23Jun24CVC provisionedCVC busy hour utilisationSources:ACCC NBN Wholesale Market Indicators Reports(CVC provisioned)and NBN Co data supplied to ACCC(CVC busy hour utilisation).Busy hour utilisation for FY24 is measured at Connectivity Serving Area peaks rather than CVC peaks used in prior years.Figure 2:NBN average network bandwidth congestionMinutes0102030405060Jun23Jul23Aug23Sep23Oct23Nov23Dec23Jan24Feb24Mar24Apr24May24Jun24Average network bandwidth congestionSource:NBN Co Monthly Progress Reports.12ACCC|Communications market report|202320242.1.3 NBN Co expands the availability of higher speed services and has committed to enhanced consultation with retailers and end-users over service quality improvements There is increased transparency of NBN Cos service improvement initiatives and service performance data under the new SAU.For example,NBN Cos Annual Service Improvement Plan(covering FY24)identified initiatives to improve service quality,service delivery and communication with retail service providers.NBN Co also published its first Annual Service Performance Review in June 2024.12NBN Co has also continued to invest heavily in network expansion or augmentation,with a view to increasing speed performance and other quality measures.These include:increasing the reach of higher download speeds over its fibre to the home and hybrid fibre coaxial networks(up to 1Gbps)reducing barriers to eligibility for upgrades to the fibre-to-the-premises network with no upfront cost for never-connected premises,and for end customers impacted by underperforming lines or with recurring faults on their existing copper servicesupgrading the fixed wireless network to increase capacity and coverage for services in regional and rural Australia with corresponding increases in maximum attainable speeds.2.1.4 Underperforming NBN services at a record low,but improvements have slowedUnderperforming NBN services are those that rarely or never achieve speeds that approach the maximum plan download speed.These services represented 4.1%of the NBN fixed line services tested in Report 25 of the ACCCs Measuring Broadband Australia program.13 While this is the lowest figure in the programs history,the rate at which underperforming services are reducing has slowed in recent years.Fibre-to-the-node is more likely to underperform than other NBN technologies.The number of consumers on underperforming fibre-to-the-node connections that are on NBN 100 Mbps plans remains relatively high.14 Underperformance impacts 7%of regional consumers with fixed line connections compared to 4%of their urban counterparts,with a higher proportion of regional consumers connected via fibre-to-the-node.15 As indicated above,NBN Co has removed the requirement for an end-user to order a higher speed tier when requesting a fibre-to-the-premises upgrade where the end-user has an underperforming line or is eligible for an upgrade as part of the assurance fibre upgrade program.Fibre upgrades are being offered to fibre-to-the-node and fibre-to-the-curb premises within NBN Cos fibre upgrade footprint not capable of download speeds of 25Mbps,and premises not capable of 50Mbps download speeds that have experienced sustained dropouts or experienced multiple truck rolls in the last year.End-users should experience service quality improvements associated with proposed fibre upgrades once they are successfully connected to the fibre network.The overall success of this initiative relies on competition in the retail market to raise consumer awareness and drive retailers and NBN Co to migrate consumers efficiently onto upgraded network connections.12 NBN Co,Annual Service Performance Review,June 2024,accessed 31 October 2024.13 ACCC,Measuring Broadband Australia Report 25 June 2024,26 June 2024,accessed 31 October 2024.14 ACCC,Measuring Broadband Australia Report 24 March 2024,27 March 2024,accessed 31 October 2024.15 ACCC,Measuring Broadband Australia Report 23 December 2023,12 December 2023,accessed 31 October 2024.13ACCC|Communications market report|202320242.2 Sustained price increases in the mobile marketConsistent with pricing trend in recent years,the national mobile network operators increased the prices of their post-paid flagship brand mobile plans during 202324.In July 2023,Telstra increased the prices of its post-paid plans(by around 7%)in line with its annual CPI-linked pricing adjustments and increased the data allowance on some plans.16 This increase followed similar CPI-linked price increases in July 2022.17 However,in May 2024,Telstra announced it was stepping away from a similar annual CPI-linked price review in 2024.18 In July 2024,Telstra announced that the prices of its post-paid services would increase by between$2 and$4 from August 2024.19 For most of the plans the price increases were not accompanied by increases in data allowance.TPG Telecom announced in January 2024 that its flagship Vodafone brand had raised prices by between 6%and 9%for new post-paid customers.20 Data allowances for these plans also increased.In March 2024,TPG Telecom further announced a$4 per month price increase for its existing customers on Vodafone-branded post-paid mobile plans(effective from mid-April 2024).21In May 2024,Optus increased the prices of its monthly post-paid plans and offered higher data allowances.This represented a price increase of 56%for new customers.This was followed by an announcement in June 2024 that Optus would move existing customers onto these new plans from August 2024,which,in many cases,are more expensive than existing plans.22 Optus also reduced the price of its most expensive monthly post-paid plan.23All 3 national mobile network operators also increased the prices of their pre-paid mobile plans in 202324,often with an accompanying increase in data allowances which remain well above the average monthly data usage.24 There were also price increases with respect to some sub-brands offered by the mobile network operators,such as Belong and Amaysim,and services offered by some mobile virtual network operators,such as Aussie Broadband and ALDImobile.25These sustained price increases have a significant impact on consumers because 88%of end-users have a post-paid or pre-paid plan with one of the national mobile network operators(such as Telstra,Optus or Vodafone).16 T Donnelly,Telstra to hike mobile plan prices from July,Canstar Blue,16 May 2023,accessed 16 October 2024.17 T Donnelly,Telstra confirms phone plan prices will rise in July,Canstar Blue,3 June 2022,accessed 16 October 2024.18 V Brady,Telstra announces organisational changes and action on cost;Provides early FY25 guidance and reaffirms FY24 guidance Transcript,Telstra,21 May 2024,accessed 16 October 2024.19 B Whitcomb,Were making some changes to our mobile pricing this year,heres why,Telstra,9 July 2024,accessed 16 October 2024.20 J Gearie,Vodafones just hiked the prices on its phone plans are they still good value?,Techradar,15 January 2024,accessed 16 October 2024.21 J Gearie,Vodafone is increasing some mobile plan prices by AU$4,so Ive found some more lucrative options,Techradar,6 March 2024,accessed 16 October 2024.22 A Choros,Optus upping mobile plan prices for some existing customers,Whistle Out,13 June 2024,accessed October 2024.23 A Choros,Optus mobile plans just got more expensive for most new customers,Whistle Out,27 May 2024,accessed 16 October 202424 B Whitcomb,Were making some changes to our mobile pricing this year,heres why,Telstra,9 July 2024,accessed 16 October 2024;Optus,Adverse Change Register,n.d.,accessed 16 October 2024;A Choros,Vodafone increasing prepaid prices in April,Whistle Out,12 March 2024,accessed 16 October 2024.25 A Choros,Belongs cheapest mobile plans are getting more expensive at the end of July,Whistle Out,28 June 2024,accessed 16 October 2024;D Crismale,amaysim plans set to get more expensive from December,Whistle Out,30 October 2023,accessed 16 October 2024;T Donnelly,Aussie Broadband raises plan prices for mobile customers,Canstar Blue,16 August 2023,accessed 16 October 2024;Aldi Mobile,Our plans are changing,n.d.,accessed 16 October 2024.14ACCC|Communications market report|20232024Additionally,the mobile network operators removed a significant number of pre-paid plans on offer.26 This reduction in available plans could,in some cases,force consumers onto a higher priced plan,causing an even higher price increase compared to those consumers whose plan remained on offer(but at a higher price).The reduction in available plans has contributed to a reduction in the overall median advertised price for mobile network operator plans on their flagship brands(discussed further in Chapter 3).Similar to observations made in previous years reports,it is unclear the extent to which consumers value the higher data allowances offered in return for higher prices.The data allowances offered by the national mobile network operators,even on low-range plans,are generally well above the average monthly reported post-paid and pre-paid data usage.The data allowance for the low-range post-paid plan for all 3 mobile network operators is now 50GB.27 For the 3 months ended June 2024,the average monthly data usage for retail post-paid customers was 18.1 GB.2.3 Technological and other developments in mobile infrastructure 2.3.1 Optus&TPG Telecom entered into agreements for provision of mobile services in regional areasOptus and TPG Telecom entered into 3 agreements that relate to the provision of mobile services in certain regional coverage areas.As a result of the agreements,Optus will use certain TPG Telecom spectrum in regional areas to supply mobile services and Optus will in turn provide TPG Telecom with network services.TPG Telecom will decommission most of its sites in areas it can access Optuss network,while some will be transferred to Optus.Optus benefits from the agreements principally from being able to access TPG Telecoms low-band and mid-band spectrum in regional areas.For this,Optus will pay TPG Telecom estimated fees of$420million over 11 years.Over the same period,Optus will earn around$1.59 billion in revenues from TPG Telecom for providing it with network services in regional areas.28Increased spectrum will enable Optus to provide additional capacity and coverage in regional areas.Optus will also accelerate its 5G network rollout as a result of the agreements,bringing forward the completion of its regional 5G network to the end of 2030 instead of 2032.TPG Telecom will use the network services supplied by Optus to offer 4G and 5G retail and wholesale services in those regional areas.The ACCC will be monitoring the impacts of these agreements on the mobiles marketThe ACCC did not oppose the proposed agreements on the basis that they are not likely to result in a substantial lessening of competition in affected markets,including the retail and wholesale mobiles markets.26 B Whitcomb,Were making some changes to our mobile pricing this year,heres why,Telstra,9 July 2024,accessed 16 October 2024;Optus,Adverse Change Register,n.d.,accessed 16 October 2024;A Choros,Vodafone increasing prepaid prices in April,Whistle Out,12 March 2024,accessed 16 October 2024.27 As at 31 August 2024.28 TPG Telecom,TPG Telecom signs regional network sharing agreements with Optus,29 April 2024,accessed 2 December 2024.15ACCC|Communications market report|20232024During the term of the agreements,there is potential for competition in the mobiles market to be enhanced and lead to better outcomes for consumers.It is likely that TPG Telecom being able to provide services over a much larger geographic coverage area would result in increased competition in the retail mobile market by providing increased choice of service providers for consumers who value higher levels of coverage(including 5G coverage)in regional and rural areas.Therefore,the ACCC considered the agreements will overall likely make Optus and TPG Telecom stronger and closer competitors with each other and,importantly,with Telstra in retail and wholesale mobile markets.It is possible that the agreements may also elicit a competitive response from Telstra in the form of lower prices and/or increased infrastructure investment compared to a scenario without the agreements in place.On the other hand,the ACCC considers that much of the building blocks of Telstras dominance will remain,despite these agreements by Optus and TPG Telecom.Telstras competitive advantage would likely remain in regional areas by virtue of its dominant market shares with low rates of churn.Telstra would continue to have the greatest number of mobile sites and terrestrial coverage advantage,and it would also remain well ahead in the deployment of 5G.The trend of sustained price increases by mobile network operators over the past couple of years and Telstras enduring market share dominance in regional,rural,and remote areas are of concern to the ACCC.However,there is a possibility that the increased overall strength of Optus and TPG Telecom relative to Telstra because of these arrangements will impact this trend.In addition,the ACCC notes the potential for emerging technologies as such as LEO satellites to further disrupt the market and enable Optus and TPG Telecom to market their services to areas previously only served by Telstra.Market developments in relation to LEO satellite services are discussed below.In light of the Optus and TPG Telecom agreements,the ACCC will continue to monitor changes to mobile prices,market shares,and investments going forward.2.3.2 New LEO satellite entrants increasing prospect of infrastructure competitionLow-Earth orbit(LEO)satellites are those that circle around the Earth at much lower altitudes(around 160 km to 2,000 km)than other satellites.A constellation of LEO satellites is required to provide continuous coverage of an area or for full coverage of Earth.By orbiting closer to Earth,LEO satellites allow for higher data speeds and lower latency than traditional geostationary satellites.They may also provide a cheaper alternative to providing mobile coverage in regional and remote areas compared to terrestrial networks.During 202324,developments in service offerings using LEO satellite technology continued apace.Starlink has continued to grow its Australian customer base,after launching here in 2021.Starlink reported over 200,000 Australian customers in March 2024.29 This has grown to over 250,000 Australian customers as of July 2024.3029 Starlink,Starlink,Starlink is now connecting more than 200K customers and counting across Australia,5 March 2024,accessed 28 October 2024.30 Starlink,Starlink,Starlink now serves high-speed internet to more than a quarter million active Aussie customers,connecting 2.5%of homes across Australia!,27 July 2024,accessed 28 October 2024.16ACCC|Communications market report|20232024Telstra has announced that it is exploring and testing direct-to-handset capability with Lynk Global as way to extend its mobile coverage.31 TPG Telecom has also announced a partnership with Lynk Global for direct-to-handset services,starting with SMS trials in 2025.32 In July 2023,Optus announced a partnership with Starlink to trial the integration of LEO satellites with its terrestrial mobile network to provide direct-to-handset services.33 However,Optuss plans to cover 100%of Australia from late 2024 onwards appear to have been delayed because SpaceX,which owns Starlink,is reported to be facing US regulatory delays.34 In the fixed broadband and voice services market,Telstra began reselling Starlink voice and broadband internet services to regional and remote business customers in late 2023 and began offering these services to residential customers in March 2024.35 Vocus has also commenced selling Starlink broadband services to business and government entities.36Eutelsat and Telstra announced the largest roll out of OneWeb LEO satellite backhaul in Australia in February 2024.The OneWeb LEO satellites will provide upgraded backhaul to more than 300 remote Telstra mobile sites in the next 18 months and improve mobile reliability in areas where terrestrial backhaul is susceptible to natural disasters.37In June 2024,Amazon announced Australia will be one of the first countries to host a demonstration site for its Project Kuiper LEO satellite service.Australian customer trials are expected to start in late 2024,with commercial services to follow in mid-2025.38 Amazon will operate as an internet service provider in Australia and can support other carriers with backhaul services to extend and in-fill their own terrestrial network coverage areas.392.3.3 Mobile network operators shut down 3G networks Telstra,Optus and TPG Telecom have all shut down their 3G networks.TPG Telecom closed its network first,commencing in December 2023 and completing the closure in January 2024.Telstra and Optus both closed their 3G networks as of 28 October 2024,after extending their initial planned closure dates earlier in the year.40 The delay of Telstras and Optuss 3G network shutdown was a result of the need to undertake additional work to address significant concerns regarding the impact of the shutdown on mobile devices that are dependent on 3G technology.These included,in particular,some 4G mobile phones that rely on 3G networks to make emergency calls.The shutdown of the 3G networks enabled all 3 mobile network operators to repurpose some of their spectrum that was originally used for 3G technology for 4G and/or 5G technologies.Telstra has stated that closing its 3G network will enable it to expand its 5G coverage in regional and remote 31 V Brady,Telstra announces organisational changes and action on cost;Provides early FY25 guidance and reaffirms FY24 guidance Transcript,Telstra,21 May 2024,accessed 16 October 2024.32 M Gabaji,TPG strikes satellite deal to erase mobile dead zones a rural rescue or Optus rivalry?,Finder,28 August 2024,accessed 16 October 2024.33 Optus,Together Optus and SpaceX Plan to Cover 100%of Australia,12 July 2023,accessed 16 October 2024.34 T Long,EXCLUSIVE:Optus plans for 100%mobile coverage of Australia delayed by SpaceX and US Regulators,EFTM,7 September 2024,accessed 16 October 2024.35 B Whitcomb,Telstra Satellite home internet with Starlink is here heres what you need to know,Telstra,25 March 2024,accessed 16 October 2024.36 Vocus,Vocus Satellite Starlink,n.d.,accessed 16 October 2024.37 Business Wire,Telstra and Eutelsat OneWeb Launch Largest Deployment of LEO Backhaul in Australia,12 February 2024,accessed 16 October 2024.38 Talk Satellite Asia-Pacific,Amazon reveals Australian launch plans for Project Kuiper,n.d.,accessed 16 October 2024.39 Amazon,Better Delivery of Universal Services Discussion Paper Amazon Project Kuipers response,1 March 2024,accessed 16 October 2024.40 Telstra initially planned to close its 3G network on 30 June 2024,then at the end of August.Optus initially planned to close its 3G network in September 2024.17ACCC|Communications market report|20232024Australia,using the 850 MHz spectrum previously used to deploy its 3G network.41 Optus has also stated that it will be able to re-direct low-band spectrum previously used for its 3G network for 4G and 5G services post-3G shutdown.42 TPG Telecom had already redeployed its 2100 MHz spectrum band used for 3G metropolitan services for use in its 4G network,with its remaining 3G spectrum(900 MHz)expiring in June 2024.43 TPG Telecoms customers will also gain access to additional 4G and 5G coverage in regional areas,as part of the regional network and spectrum sharing agreements with Optus discussed above.2.3.4 Home wireless broadband adoption continues to riseHome wireless broadband is a type of fixed wireless service,delivered over existing mobile networks.Home wireless broadband has seen increasing uptake in recent years and has become an attractive broadband option for consumers,accounting for 58%of non-NBN broadband connections(6.6%of all broadband services)reported in the Internet Activity record keeping rule in 202324.This data does not account for the reported over 250,000 Starlink customers,which will be included in future Internet Activity record keeping rule collections(discussed in section 3.2.1).Mobile network operators have marketed home wireless broadband as an alternative to the NBN or other fixed line broadband.44 While home wireless broadband can provide a substitute service,as the price,speed and data allowance of these plans are comparable to fixed broadband plans.However,there are some key differences in terms of services it can support,such as not supporting fixed telephony,security or personal alarms or remote server access,or other services highly sensitive to latency(e.g.specialist applications).Home wireless broadband is not available to all consumers,with access subject to mobile network tower locations and capacity.Mobile network operators market home wireless broadband as either 4G and 5G,with different speed limits for each depending on the technology and any speed caps.However,these speeds can be quite varied and shift over time,as networks become more heavily utilised or network deployments are improved.Speed claims made in respect of uncapped plans have also declined over time.41 Telstra,Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport References Committees inquiry into the shutdown of the 3G Mobile Network,31 May 2024,p 7.42 Optus,Submission to the Senate Rural and Regional Affairs and Transport References Committee shutdown of the 3G mobile network,May 2024,p 4.43 ARN,TPG Telecom confirms 3G switch off date,27 September 2022,accessed on 18 October 2024.44 For example:Telstra,5G Home Internet,accessed on 22 October 2024;Optus,4G Home Internet,accessed on 22 October 2024.18ACCC|Communications market report|202320242.3.5 Technology changes to telecommunications in regional areasOverall,202324 saw continuing change for regional and remote telecommunications,across mobile,fixed phone lines and broadband.Changes are being driven by significant shifts in the ownership and availability of infrastructure and new technologies,and are highly likely to have implications for competition and market structures going forward.The NBN fixed wireless network saw some expansion in 202324,as part of NBN Cos enhancements to the network,improving the availability of fast and low-latency broadband.NBN Co is planning to expand this network to cover an additional 120,000 premises that were previously or currently designated as NBN satellite areas.45LEO satellite technologies have had an increasing impact in the regional market,with Starlink offering a high-speed internet alternative for regional consumers.Telstra has also begun retailing a Starlink service for regional customers,with broadband and fixed voice services available.46 While Optus did not launch its direct-to-mobile services in collaboration with SpaceX in 2024 as originally planned,it is expected the future roll out of direct-to-device services will likely significantly extend mobile coverage for regional consumers.47 ADSL connections using Telstras copper network(of which the majority is in regional areas)continue to decrease,and Telstra exited the retail market for these services in 2024.Telstras wholesale ADSL product is still available through other retailers,although this isnt offered by most of the major retailers.The closure of 3G networks has affected regional customers that rely on specialised equipment or services used in these areas.Consumers who relied upon repeater units or Next Generation Wireless Link services have needed to make significant change beyond upgrading handsets.Those with 3G-only repeaters or antennas needed upgrading to enable 4G signals,while customers using fixed voice lines and broadband that relies upon Next Generation Wireless Link services have had to work with Telstra for an alternative option.4845 NBN Co,UPGRADES TO nbn FIXED WIRELESS,accessed 6 November 2024.46 Telstra,Telstra announces agreement with Starlink,3 July 2023,accessed 6 November 2024.47 Optus,Together Optus and SpaceX Plan to Cover 100%of Australia,12 July 2023,accessed 6 November 2024.48 Telstra,Goodbye 3G,4 November 2024,accessed 6 November 2024.19ACCC|Communications market report|202320243.Pricing and consumer trendsAs discussed above,the ACCCs analysis uses advertised pricing from the month of June,drawn annually from Critical Information Summaries,to estimate prices for telecommunications products.This means that the prices for legacy plans that customers may still be on are not considered.Prices used in the analysis are the ongoing price and do not include temporary discounts.Unless otherwise stated,pricing analysis does not take into account changes in product features,such as data allowances or other inclusions.3.1 Retail NBN fixed broadband services Fixed broadband services are internet services provided over fixed networks such as the NBN and other fibre-based networks.This section focuses on NBN services that are provided over non-satellite technologies,with some limited analysis on satellite services.493.1.1 Services in operation Over 202324,NBN Co reported a 0.6%increase in the number of wholesale residential fixed line and fixed wireless services in operation to 8.715 million services.50 Reporting by major retailers under the ACCCs Internet Activity Report covers 7.412 million retail NBN broadband services as at June 2024,or approximately 85%of NBN services(fixed line and fixed wireless).51 This indicates that a portion of NBN services(approximately 1.303 million)were on-sold by NBN access seekers to the NBN reseller market,or were supplied by NBN Co to smaller retailers not covered by the ACCCs Internet Activity reporting.NBN retail market shares can be determined by comparing the number of NBN services reported by retailers in the Internet Activity record keeping rule to the total number of wholesale NBN services reported by NBN Co(Figure 3 below).In June 2024,Telstra had the largest market share in the retail market for NBN fixed broadband services(35%),followed by TPG Telecom(20%)and Optus(12%).52 Competing retailers have impacted the retail market over time,including Aussie Broadband,who has increased its share to 7%,and Superloop,which has reached 4%of the market(and was included in the Others category for 2022 and 2023)in Figure 3 below.49 NBN fixed wireless has been included in the analysis of fixed broadband services due to the functional similarity between fixed wireless and other fixed access technologies.50 ACCC,NBN Wholesale Market Indicators Report June quarter 2024 report,27 August 2024,accessed 30 September 2024;ACCC,NBN Wholesale Market Indicators Report June quarter 2023 report,15 September 2023,accessed 30 September 2024.51 ACCC,Internet Activity Record Keeping Rule June 2024 Report,December 2024.See section(4)(1)for major retailers in ACCC,Internet Activity Record Keeping Rules,December 2022,accessed 9 October.52 A different methodology has been used for market shares this year,where proportion market shares have been calculated using retail numbers for major providers from the Internet Activity Report,while the total number of NBN services from the NBN Wholesale Market Indicators report is used for the denominator.Previously the total number of all NBN retail services from the Internet Activity Report was used as the denominator.Sub-brands are included under the major organisation.20ACCC|Communications market report|20232024Figure 3:Retail NBN market share(major retailers only),2022 to 20240 0Pp0%Jun22Jun23Jun24TelstraTPG TelecomOptusAussie BroadbandVocusSuperloop*Others3875! %7%7%7%5%5%5%4%Note:*Superloop is included in the Others category for 2022 and 2023.Source:ACCC Internet Activity Reports and NBN Wholesale Market Indicators Reports.Figure 4 below shows the 50 Mbps speed tier remains the most popular choice for consumers of NBN fixed line broadband,with a slight increase in 2024.As previously reported by the ACCC,the increase in 50 Mbps speed tier services in 2024 alongside decreasing 100/20 Mbps services is unlikely to reflect an actual shift in household preferences from 100/20 Mbps services to 50Mbps.53 Rather,it is more likely that NBN Cos wholesale price changes in 2023 have led to the 50Mbps wholesale tier being more cost-effective for supplying 50 Mbps retail services.That is,previously some 50 Mbps retail services were supplied to end-users using a 100/20 Mbps wholesale service to over provision their retail offers in order to realise cost efficiencies.Figure 4:NBN fixed line broadband wholesale services by speed tier,2022 to 2024Jun23Jun24Jun22Services in Operation(millions)012345612/1 Mbps25/x Mbps50/20 Mbps100/20 Mbps100/40 Mbps250/25 Mbps1000/50 MbpsNote:25/5 Mbps and 25/10 Mbps speed tiers are combined as retailers tend to offer one of the 2 plans,rather than both.Source:NBN Wholesale Market Indicators Report June quarter 2024 report.53 ACCC,Aussie Broadband leads wholesale growth on the NBN,14 March 2024,accessed 8 October 2024.21ACCC|Communications market report|20232024While only accounting for a small share of services,the 250/25 Mbps and 1,000/50 Mbps speed tiers have also continued to see an increase of services in operation.Estimated market share of 250 Mbps and above retail plans has doubled,from 2.5%to 5%,between 2022 and 2024.Consumers continue to move off the 12 Mbps service,which only accounted for 5.7%of fixed NBN services at the end of June 2024.54 The 25 Mbps speed tier increased in the year to June 2024,with some customers likely moving up from the 12 Mbps speed tier and down from the 50Mbps speed tier.Consumers on NBN fixed wireless connections continue to trend towards both the higher speed Fixed Wireless Plus and lower speed Fixed Wireless 12 Mbps connections(Figure 5 below).The introduction of Fixed Wireless Home Fast and Home Superfast speed tiers in the second half of 2024 may also create a significant consumer shift in the coming year.Figure 5:NBN wireless and satellite broadband wholesale services by speed tier,2022 to 2024Jun23Jun24Jun22Services in Operation(thousands)050100150200250300Fixed Wireless12/1 MbpsFixed Wireless25/5 MbpsFixed WirelessPlusSkyMuster12/1 MbpsSkyMuster25/5 MbpsSkyMusterPlusSource:NBN Wholesale Market Indicators Report June quarter 2024 report.SkyMuster Plus services have been increasing since it was introduced,but at a slower rate than the decrease in subscribers on standard SkyMuster plans.This suggests subscribers may be moving to alternative satellite providers,such as Starlink,or other technologies,such as mobile network options.However,the number of subscribers moving away from NBN satellite services could be related to the expansion of the NBN fixed wireless footprint,which may also contribute to the increase in Fixed Wireless 12 Mbps plans in 2024.54 ACCC,Internet Activity Record Keeping Rule June 2024 Report,December 2024.22ACCC|Communications market report|202320243.1.2 Pricing Range of plans available Retailers offer plans at various price points and the number and variety of plans available varies between these price points.55 Figure 6 below shows the proportions of NBN retail fixed broadband plans at various price points over the last 5 years.For example,the$5060 price point captures retail service plans that are greater than$50 and less than or equal to$60.Figure 6:Percentage of NBN fixed line broadband plans at various monthly price points,2021 to 20240%5 %$2030$3040$4050$5060$6070$7080$8090$90100$100110$110120$120130$130140$140150$150160$160170$170180$180190$190200$200 Jun20Jun21Jun22Jun23Jun24Proportion of plansNote:Prices are in nominal terms.Source:ACCC estimates based on information from service provider websites.Over recent years,there has been an increase in the number of higher priced plans offered by retailers;however,recent changes to NBN wholesale pricing have brought the higher speed tiers to lower price points,encouraging consumers to move to the high speed plans.Concurrently,the popular lower speed plans have experienced an increase in retail price,leading to a much narrower distribution of fixed broadband prices.Overall,advertised prices for NBN fixed line broadband services decreased in 202324 across all plans sampled,as shown in Figure 7.From 2023 to 2024,per month retail prices(exclusive of discounts):on low-range plans(25th percentile)decreased by 3%(or by$2)to$73 at the mid-range(median)price point decreased by 10%(or by$10)to$85on the higher-range plans(75th percentile)decreased by 8%(or by$9)to$105.55 Data on retailers market offers are drawn annually from Critical Information Summaries,which retailers must publish on their website.Prices in the Critical Information Summaries may not reflect prices predominantly advertised on the website of service providers due to temporary discounting.23ACCC|Communications market report|20232024Figure 7:Median advertised price and interquartile range for NBN fixed services,2019 to 2024$0$20$40$60$80$100$120Price$66$70$70$75$75$73$79$80$85$89$95$85$90$90$100$109$114$105Jun19Jun20Jun21Jun22Jun23Jun24Note:Prices are in nominal terms,across all plans sampled.Includes median(opal).Source:ACCC estimates based on information from service provider websites.Price decreases on the available low-range,mid-range and higher-priced plans were also reflected across the average price of plans sampled by the ACCC,with all common speed tiers,other than 50 Mbps,having a significantly lower price in 2024(Figure 8).Figure 8:Average NBN fixed line broadband advertised prices by download speed,2022 to 2024$0$20$40$60$80$100$120$14012 Mbps25 Mbps50 Mbps100 Mbps250 MbpsPriceJun22Jun23Jun24Note:Prices are in nominal terms.Source:ACCC estimates based on information from service provider websites.One of the reasons for the reduction in average available price across all speed tiers is a simplification of bundled products offered by retailers.While previously retailers may have offered different plans with or without bundled inclusions,such as voice calls,these options now frequently appear as add-ons,or are simply included without additional cost.This has led to fewer bundled plans,which typically have a higher cost,resulting in lower average costs in the ACCCs analysis.24ACCC|Communications market report|20232024To determine price changes without a loss of features across years,the ACCC examined a narrower,standard set of comparable products between 2023 and 2024(Figure 9).56 In this analysis,an increase in prices across the lower speed tiers can be seen,which more closely reflects the changes experienced by most consumers.Figure 9:Average price changes across simplified NBN fixed line broadband plans of major retailers,2023 to 2024Average price difference 20232024-$15-$10-$5$0$5$1012 Mbps25 Mbps50 Mbps100/20 Mbps100/40 Mbps250 MbpsSource:ACCC estimates based on information from service provider websites.Note:Only major retailers and a simplified list of comparable plans was used to demonstrate these price changes.Under this simplified price comparison set out in Figure 9,the retail price of major retailers 100 Mbps and greater plans had significant price decreases in 2024(between$313),while the 12 and 50 Mbps plan prices increased(by over$5 and around$3 respectively),somewhat in line with the latest wholesale pricing under the SAU discussed in Chapter 2.In contrast,the 25 Mbps plans experienced a slight increase in retail pricing(by less than$1).Customer weighted pricesWeighting the available NBN broadband plan prices with the number of NBN customers on major retailers,as per the NBN Wholesale Market Indicators Report figures,provides a closer estimate of what consumers are paying for NBN broadband(Figure 10).56 This subset of plans was based on data from 11 of the 32 NBN service providers surveyed,comprised of the major retailers that cover the majority of the NBN market share.25ACCC|Communications market report|20232024Figure 10:Average price weighted by number of retailers customers and their advertised NBN plans,and number of customers sampled for each speed tier,2024Number of Customers on Major Retailers(millions)Weighted average price1234567$0$20$40$60$80$100$120$14012/1 Mbps25/x Mbps50/20Mbps100/20Mbps100/40Mbps250/25Mbps1000/50MbpsFixedWireless12 MbpsFixedWireless25 MbpsFixedWirelessPlusWeighted Average Price(LHS)Services in Operation(RHS)0Source:NBN Wholesale Market Indicators Reports and ACCC estimates based on information from service provider websites.After weighting advertised prices with the estimated number of customers on each plan,on average,customers subscribed to 50 Mbps plans are likely to be paying around$88 per month,significantly above the average advertised plan price of$80(as per Figure 8 above).This highlights that,despite the availability of cheaper plans within the same speed tier,a significant portion of consumers are purchasing higher priced plans.This may indicate that consumers are either less aware of lower cost options,or place greater emphasis on non-price factors,such as plan inclusions or brand reputation.This trend is consistent across almost all speed tiers.3.2 Retail non-NBN servicesNon-NBN fixed broadband services are provided over networks owned by service providers other than NBN Co.Historically,these services have been mostly delivered over Telstras copper network,the Optus and Telstra hybrid fibre coaxial(HFC)networks,and small fibre networks in apartment complexes,regional cities and new housing estates.Some of these networks have been transferred to NBN Co or other carriers in recent years,while Optus HFC network has been decommissioned and Telstras copper network continues to be decommissioned within the NBN fixed line footprint.Outside the NBN fixed line footprint,Telstra is required to maintain its copper network,which is capable of providing access to digital subscriber line(DSL)broadband services.57 However,many retail service providers no longer offer legacy ADSL services,including Telstra,which now only maintains the service for existing ADSL customers.Telstra continues to offer the service wholesale to other retailers,and some retailers are still marketing ADSL plans.Some consumers may also have the choice of receiving fixed wireless(including from regional wireless internet service providers)or satellite broadband services in these areas.More recently,there has been an increase in mobile network operators promoting their mobile networks to provide home wireless broadband.While this market segment was maturing,the Communications market report previously reported on home wireless broadband alongside other mobile services provided over mobile networks.However,due to the nature of the service and 57 DITRDCA,Universal Service Guarantee,3 September 2021,accessed 17 October 2024.26ACCC|Communications market report|20232024increasing consumer attraction to home wireless broadband as an alternative to traditional fixed line broadband,this type of connection is now examined alongside other non-NBN broadband services.The other major change to the non-NBN market has been the introduction of LEO satellite broadband through Starlink.On 25 September 2024,the ACCC amended the Internet Activity record keeping rules to add Starlink as a record keeper and introduce the requirement to report on their wholesale and retail satellite services.These changes will not take effect until 2025,and as such,Starlink services are not included in this years analysis.3.2.1 Services in operation Home wireless broadband is different from home Wi-Fi that is connected to a fixed line broadband service.It uses 4G&5G mobile networks,is only available in selected areas,usually metropolitan areas,and is currently only offered by mobile network operators or mobile virtual network operators.Home wireless broadband has quickly become the most common non-NBN broadband service,as shown in Figure 11 below.The number of non-NBN broadband services has been increasing since 2022,by 6%in 2023 and 16%in 2024,driven almost entirely by home wireless broadband services.The ACCCs Internet Activity Report for June 2024 shows that,as of June 2024,there were around 553,000 home wireless broadband services in operation.58 This represents an increase of 18%from June 2023,and continues the significant growth trend observed in the previous year,i.e.a 36%increase from June 2022 to June 2023.59Figure 11:Proportion of retail non-NBN services in operation by access technology,2022 to 20240 0Pp0%Jun22Jun23Jun24Home Wireless BroadbandFibreDSLHFC/cableFixed wireless45WX#$%4%4%3%Notes:The market shares above cover most,but not all,of the retail market for non-NBN broadband services.Excludes non-NBN fixed satellite access technologies.Source:ACCC Internet Activity Reports.58 ACCC,Internet Activity Record Keeping Rule June 2024 Report,December 2024.59 ACCC,Internet Activity Record Keeping Rule June 2024 Report,December 2024.27ACCC|Communications market report|20232024The number of DSL services continued to decrease,in line with previous trends,falling 20tween June 2023 and June 2024.This represents a smaller decrease than previous years,with the number of services decreasing 27tween June 2022 and June 2023.The changes are largely driven by the continuing migration of services from Telstras copper network to the NBN.A small number of DSL services are likely to remain outside the NBN fixed line footprint where Telstra is obligated to continue to maintain services on its copper network until 2032.Non-NBN HFC and Cable services also continued to decline,with the total number dropping by approximately 8%in 202324.The number of reported fibre and fixed wireless services increased in the year to June 2024,but this is related to the addition of new record keepers,Uniti Retail Pty Ltd and Superloop Limited,which have started reporting data for these technologies.In addition to the information collected by the ACCC and set out in Figure 12,Starlink announced that it has recently reached over 250,000 Australian customers in July 2024.60 This represents a share equivalent to approximately 21%of all non-NBN retail broadband services that were reported through the Internet Activity record keeping rule for June 2024.Figure 12 below shows the retail market share for the non-NBN market.From June 2023 to June 2024,Telstras market share in the non-NBN retail market has decreased slightly,driven by the decommissioning of legacy ADSL services but slightly offset by increasing home wireless broadband services.Both TPG Telecom and Optus have maintained their significant market shares,primarily made up of home wireless broadband services.The introduction of new record keepers in the 202324 reporting period contributed to the very large change to the Other market share shown between June 2023 and June 2024.61Figure 12:Retail non-NBN broadband market share(major retailers only),2022 to 20240 0Pp0%Jun22Jun23Jun24TPG TelecomOptusTelstraAussie BroadbandVocusOther39D(&#&! %3%4%5%3%3%3%2%1%Notes:The market shares above cover most,but not all,of the retail market for non-NBN broadband services.Excludes non-NBN fixed satellite access technologies.Source:ACCC Internet Activity Reports.60 Starlink,Starlink,https:/ July 2024,accessed 10 October 2024.61 ACCC,2023 amendments to record keeping rules,20 December 2023.28ACCC|Communications market report|202320243.2.2 Pricing Range of plans availableFigure 13 shows that in 2024,the greatest proportion of non-NBN fixed broadband plans were in the$50110 price range,accounting for more than 73%of all plans on offer.Figure 13:Percentage of non-NBN fixed broadband plans at various price points,2021 to 2024$2030$3040$4050$5060$6070$7080$8090$90100$100110$110120$120130$130140$140150$150160$160170$170180$180190$190200$200 Jun21Jun22Jun23Jun240%2%4%6%8 %Proportion of plans Note:Prices are in nominal terms.Source:ACCC estimates based on information from service provider websites.Figure 13 also illustrates the movement of non-NBN plans to higher price points compared with previous years,particularly extremely high-cost plans above$200 per month.Some high-cost plans above$200 per month have appeared,which provide very high performance on very small networks and are not available for many customers.In 202324,the advertised prices for non-NBN fixed line broadband services increased across all plans sampled,as shown in Figure 14.29ACCC|Communications market report|20232024Figure 14:Median advertised price and interquartile range for non-NBN fixed services,2019 to 2014$60$65$65$70$75$79$75$70$75$80$80$90$95$90$80$90$90$100$110$119$113$0$20$40$60$80$100$120$140PriceJun19Jun20Jun21Jun22Jun23Jun24*Jun24Notes:Prices are in nominal terms across all plans sampled.Includes median(opal).*Home Wireless Broadband prices included.Incldues median(violet).Source:ACCC estimates based on information from service provider websites.On a like-for-like basis(i.e.violet data in Figure 14)across the major low-range,mid-range and high-range plans,pricing of non-NBN broadband services increased between 2023 and 2024.The increase in low-range plans may be attributable to the decrease in available DSL offers,with no major retailers offering DSL plans and only very few offered by smaller retailers.However,the increase in prices in the high-end likely represents an increase in availability of niche plans on small networks,and at extremely high price points(greater than$200),as outlined above.Analysis of available plans with home wireless broadband included reduces the price of each quartile of available plans(i.e.opal data in Figure 14).The low-range and mid-range plans all have similar price points to the plans available on the NBN(see Figure 7 above).The proportion of retail plans on offer with download speeds of 50 Mbps or less also continued to decline,now accounting for around 35%of the plans,while a greater number of higher speed plans were also available.Similar to changes in NBN pricing,the non-NBN 12 and 50 Mbps plans increased in price for 2024,while the other common speed tiers all saw a decrease in average pricing(Figure 15).The change in price of these plans is better reflected for non-NBN networks as they have historically had lower availability of bundled plans,meaning changes in pricing are better reflected in the average prices(see Figure 9 discussion).30ACCC|Communications market report|20232024Figure 15:Changes in average non-NBN fixed broadband advertised prices by plan download speed,2021 to 202412 Mbps25 Mbps50 Mbps100 Mbps250 MbpsPrice$0$20$40$60$80$100$120$140$160Jun21Jun22Jun23Jun24Jun24*Note:Prices are in nominal terms.Plans with different speed tiers are excluded.*Home Wireless Broadband included.Source:ACCC estimates based on information from service provider websites.The price,speed and data allowance of home wireless broadband plans are comparable to fixed broadband plans such as those supplied over the NBN.As such,home wireless broadband services are becoming increasingly attractive to consumers in some areas as an alternative to fixed line services.The current home wireless broadband price and speed offerings with unlimited downloads(excluding discounts)are shown in Table 1 below.31ACCC|Communications market report|20232024Table 1:Advertised prices and typical speeds for home wireless broadband,flagship mobile network operator brands,2023 to 2024Retailer2023 price622024 price63Typical evening download speed 202364 Typical evening download speed 202465Telstra$85$8550600 Mbps66 30633 Mbps67Optus$99$99240 Mbps210 MbpsOptus$79$7987 Mbps87 MbpsOptus$69$6945 Mbps45 MbpsVodafone$70$7096 Mbps100 MbpsVodafone$65$6550 Mbps50 MbpsVodafonen/a$60n/a15 MbpsSource:Retailers websites.3.3 Fixed voice servicesThe number of fixed voice services in operation reported to the ACCC,including both legacy copper and VoIP-based services(such as NBN),has seen a slow decline over the last 3years,reducing from 6.8 million to just below 6 million in June 2024(Figure 16).Unconditioned Local Loop Services make up less than 10 services Australia wide,and nearly all copper voice services are now delivered by Telstra.6862 ACCC,Communications Market Report 202223,p 11.63 As at 11 October 2024,Telstra,Why choose 5G Home Internet?,accessed 11 October 2024;Optus,Choose your Optus 5G home internet plan,accessed 11 October 2024;Vodafone,Stay connected with 5G Home Internet,accessed 11 October 2024.64 ACCC,Communications Market Report 202223,p 11.65 As at 11 October 2024,Optus,Choose your Optus 5G home internet plan,accessed 11 October 2024;Vodafone,Stay connected with 5G Home Internet,accessed 11 October 2024.66 Telstra,Why choose 5G Home Internet?,accessed 2 November 2023.67 Telstra,Why choose 5G Home Internet?,accessed11 October 2024;Average busy period speed(711 pm)was 317 Mbps as at 11 October 2024.68 ACCC,Telstra customer access network record keeping rule,accessed 20 November 2024.32ACCC|Communications market report|20232024Figure 16:Fixed voice services in operation,2022 to 2024Services in Operation (millions)12345678Jun22Jun23Jun24NBN Traffic Class 1(VoIP)(1)Copper(2)Fixed lines(3)0Source:(1)NBN Wholesale Market Indicators Reports,(2)Quarterly snapshots of Telstras customer access network and (3)ACCC Division 12 record keeping rule.Figure 17 below shows that the market shares of fixed voice services in operation have fluctuated over the last 4 years,although Telstra has consistently had the highest market share of fixed voice services.Figure 17:Retail market share for fixed voice services,2021 to 20240 0Pp0%TelstraTPG TelecomOptusVocusJun21Jun22Jun23Jun2454QQS&$# %2%6%6%3%Source:ACCC Division 12 record keeping rule.Range of legacy voice plans available Only a few standalone voice plans were available in 202324 for the fixed voice services over the legacy copper network.These were usually offered in regional and rural areas outside the NBN fixed line footprint.In March 2024 Telstra was offering a voice only plan with unlimited local,national and mobile calls for$50.69 69 Telstra,Telstra Ultimate Voice Plan,n.d.,accessed 20 November 2024.33ACCC|Communications market report|202320243.4 Retail mobile phone Telstra,Optus and TPG Telecom continue to dominate the retail market for mobile services.The 3 mobile network operators operate large vertically integrated telecommunications businesses,offering a range of pre-paid and post-paid retail products.These services include:mobile phone plans(a bundle of voice,messaging and data services)standalone mobile broadband servicesfixed wireless services(4G and 5G)capable of delivering broadband to fixed addresses at home and small business premises.Apart from the mobile network operators,there are also mobile virtual network operators that acquire wholesale mobile services to provide retail services to consumers.In addition to the mobile network operators flagship retail brands(Telstra,Optus and TPG Telecoms Vodafone),they also operate sub-brands that compete directly with the mobile virtual network operators for the price sensitive segment of the retail market.These mobile network operator sub-brands include Belong,Felix and Amaysim.Mobile services remain the most common form of access to both the internet and voice services in Australia.As at 30 June 2024,there were over 30 million mobile phone services in operation,compared to the Australian population of 27.1 million.70 Approximately 61%or 18.3 million of the services were post-paid services,with pre-paid services accounting for the remainder.Between 30 June 2023 and 30 June 2024,the total number of post-paid mobile phone services in operation has grown marginally by 0.9%.However,the total number of pre-paid mobile phone services has grown by 7.1%over the same period.We have previously heard that pre-paid plans are considered more affordable in the short-term if a consumer has a low or unreliable income,so this trend may be reflective of increasing financial pressures for some consumers.71The functional distinction between post-paid and pre-paid mobile phone services has diminished in recent years,with pricing and data inclusions on pre-paid plans gradually converging to those on post-paid plans.Additionally,some retailers provide both a pre-paid and post-paid option on the same plan.3.4.1 Services in operationFigure 18 shows that retail market shares for mobile phone services have remained steady over at least the last 4 years,heavily concentrated in retail brands operated by the mobile network operators including related sub-brands.As at 30 June 2024,the 3 mobile network operators collective market share(inclusive of sub-brands)was significant at 88%.Telstra continued to lead with 42%,followed by Optus(28%)and TPG Telecom(17%).The remaining 12%market share belongs to mobile virtual network operators.The collective market share of mobile virtual network operators has grown in the last 3 years,up from 9%in 202021(Figure 18).70 ACCC,Internet Activity Record Keeping Rule June 2024 Report,December 2024;Australian Bureau of Statistics,National,state and territory population,March 2024,19 September 2024,accessed 11 October 2024.71 ACCC,Regional Mobile Infrastructure Inquiry final report,July 2023,p 15.34ACCC|Communications market report|20232024Figure 18:Retail market share for mobile phone services mobile network operators vs mobile virtual network operators,2021 to 202443CCB00)(%9%9%Jun21Jun22Jun23Jun24Telstra flagship sub-brandsOptus flagship sub-brandsVHA/TPG flagship sub-brandsMVNO0 0Pp0%Market shareSource:ACCC Internet Activity Reports.3.4.2 Range of plans availableFigure 19 below illustrates the range of plans available for the mobile network operators flagship brands from 202021 to 202324.In 202324,the most popular price point for mobile network operator flagship plans was between$50$60,unchanged from previous years.However,the number of plans included with the sample has also reduced from 35 in 202021 to 20 plans in 202324.This suggests that the mobile network operators are moving towards a consolidated number of service offerings,which may be resulting in more expensive plans overall.For example,in 202324,there were no monthly plans/recharges(pre-paid or post-paid)available in the$20$30 category on the mobile network operators flagship brands.72Additionally,it is worth noting that the increase in the percentage of plans in the$40$50 and$60$70 in 202324 was not driven by changes in prices or the number of plans in these categories,but rather by a reduction in the total sample size.As previously discussed,Optus removed pre-paid plans from sale above and below these price points.7372 Excluding discounts.73 A Choros,Optus pre-paid plans are getting speed limits in July,WhistleOut,24 May 2023,accessed 23 July 2024.35ACCC|Communications market report|20232024Figure 19:Percentage of mobile network operator flagship mobile phone plans at various price points,2021 to 20240%5 %001020203030404050506060707080809090100100110 110120Proportion of plansAdvertised price($)Jun21Jun22Jun23Jun24Source:ACCC estimates based on information from service provider websites.Conversely,for non-mobile network operator flagship plans the most popular price point was$20$30(Figure 20).74 In part,this appears to be driven by a reduction in plans between$10$20,and as discussed below,suggests a genuine price increase.In 202021,the most popular price point was also$20$30.So,while the spread of plans has increased for non-mobile network operator flagship plans,the most popular price point in 202324 is still well below that of the mobile network operator flagship plans.Figure 20:Percentage of non-mobile network operator flagship mobile phone plans at various price points,2021 to 20240101020203030404050506060707080809090100100110 110120Proportion of plansAdvertised price($)Jun21Jun22Jun23Jun240%5 %05%Note:Non-mobile network operator flagship refers to mobile network operator sub-brands and mobile virtual network operators.Source:ACCC estimates based on information from service provider websites.74 Non-mobile network operator means sub-brands and mobile virtual network operators.36ACCC|Communications market report|202320243.4.3 Price changesFigure 21 below highlights the divergence in the median advertised prices for the mobile network operators flagship brands compared to prices for the mobile network operators sub-brands and the mobile virtual network operators products.Figure 21 draws on data for both pre-paid and post-post plans.Figure 21:Median advertised price for mobile network operator flagship,sub-brand and mobile virtual network operator mobile phone plans,2021 to 2024PriceService providerJun21Jun22Jun23Jun24$0$10$20$30$40$50$60$70MNO flagshipMNO sub-brandMVNOTotalSource:ACCC estimates based on information from service provider websites.Figure 21 shows that,overall,the median advertised price for mobile phone services across all sampled providers has increased by 7.1%(or$2.50)in the since 202021.The entire increase was experienced between 202223 and 202324.The median advertised price for the mobile network operators flagship brands has decreased by 5%from$58 in 202223 to$55 in 202324,reversing the trend observed in previous years.As discussed above,this movement is likely driven by a significant reduction in the number of plans available between 202223 and 202324.The median advertised price for mobile network operator sub-brands increased by 3.4%(or$1)from 202021 to 202324,but was unchanged between 202223 and 202324.The median advertised price for mobile virtual network operators plans increased by 13.3%(or$4)between 202223 and 202324 after remaining unchanged for the previous 2periods.Overall,the median advertised prices for the mobile network operators flagship brands have been significantly higher than the median advertised prices of their sub-brands and the mobile virtual network operators plans for at least the last 4 years.3.4.4 Data allowancesThe price increases in mobile plans observed in recent years are often accompanied with significant increases in data allowances.This suggests that while the plans may have become more expensive,they are offering more value by way of more included data.However,consumers may not value having a greater data allowance.37ACCC|Communications market report|20232024Figure 22 below shows the median advertised cost per gigabyte of data across different groups of service providers.During 202324,the median advertised cost per gigabyte of data has become even across all service provider groups.This trend has been driven by ongoing increases to data allowances and prices together with the changing composition of plans on offer(notably consolidation of plans on offer).Figure 22:Median advertised cost per gigabyte of data for mobile phone plans based on advertised data allowances,2021 to 2024PriceService providerJun21Jun22Jun23Jun24$1.5$1.2$1.3$1.4$1.0$1.0$1.3$1.0$1.0$0.9$0.9$0.9$0.0$0.2$0.4$0.6$0.8$1.0$1.2$1.4$1.6MNO flagshipMNO sub-brandMVNOSource:ACCC estimates based on information from service provider websites.Consistent with the trends observed in previous reports,average monthly data usage for mobile phone plans has been consistently well below the median and average advertised data allowances from 202021 to 202324.Figure 23 shows that the median advertised data allowance across all service providers in 202324 was 40 GB,up from 30 GB in 202021,representing a 33%increase.Figure 23:Average,median,25th percentile and 75th percentile monthly data allowance for mobile phone services,2021 to 2024 Data allowanceYear25th percentileAverage Median 75th percentileMonthly average data usage0 GB10 GB20 GB30 GB40 GB50 GB60 GB70 GB80 GB90 GBJun21Jun22Jun23Jun24Source:ACCC estimates based on information from service provider websites and ACCC Internet Activity Reports.38ACCC|Communications market report|20232024In 202324,the ACCC estimates that the average advertised data allowance for plans(pre-paid and post-paid)across all service providers was 68 GB per month,However,the monthly average data usage reported to the ACCC was only 14.2GB per user,up from 9.8GB in 202021.This suggests that,on average,despite increased usage in recent years consumers do not use the higher data allowances that have been offered over time and may instead prefer lower data allowances for a lower price.3.5 Retail mobile broadband3.5.1 Services in operationMobile broadband is an internet connection that provides a short range,high data rate connection between a mobile data device and access points connected to a network.Examples include 4G/5G accessed through a laptop,USB/WiFi modem or tablet.As at 30 June 2024,there were approximately 4.2 million mobile broadband services in operation.75 Retail market shares for mobile broadband services have remained steady over at least the last 5 years,almost exclusively concentrated in retail brands operated by the mobile network operators.3.5.2 Range of plans availableFigure 24 shows that in 202324 the most popular price point for mobile broadband plans was$3040.This advertised price category is the only category to experience an increasing proportion of plans every year since 202021.Since 202223,there has been a reduction in the proportion of plans in the cheapest and most expensive categories($10$20 and$80$90)All other pricing categories experienced an increase in the proportion of plans in the last year.75 ACCC,Internet Activity Record Keeping Rule June 2024 Report,December 2024.39ACCC|Communications market report|20232024Figure 24:Percentage of mobile broadband plans at various price points,2021 to 2024Proportion of plansAdvertised price($)Jun21Jun22Jun23Jun240%5 %05202030304040505060607070808090Source:ACCC estimates based on information from service provider websites.3.5.3 Price changesSince 202021,the median advertised price for mobile broadband plans has varied from between around$35 per month to around$40 per month.The interquartile range has remained largely unchanged since 202021($35),increasing to$36 in 202324(Figure 25).Figure 25:Median advertised price and interquartile range for mobile broadband services,2021 to 2024Advertised price Interquartile rangeMedian$20$20$20$22$40$35$35$40$55$50$50$58$15$25$35$45$55$65Jun21Jun22Jun23Jun24Source:ACCC estimates based on information from service provider websites.40ACCC|Communications market report|202320243.5.4 Data allowancesThe median advertised data allowance for mobile broadband plans in 202324 was 50 GB,up from 25GB in 202021.That is a 100%increase.However,the monthly average reported data usage has decreased by 36%over the same period to 11.7 GB(down from 18.3 GB in 202021)(Figure 26).This decline in average usage suggests that,on average,in recent years consumers do not use the higher data allowances that have been offered over time and may instead prefer lower data allowances for a lower price.Figure 26:Average,median,25th percentile and 75th percentile data allowance for mobile broadband services,2021 to 2024Data allowanceYear25th percentileAverageMedian75th percentileMonthly average data usageJun21Jun22Jun23Jun240 GB10 GB20 GB30 GB40 GB50 GB60 GB70 GB80 GB90 GB100 GB110 GBSource:ACCC estimates based on information from service provider websites and ACCC Internet Activity Reports.Figure 27 below shows that that advertised price per gigabyte for mobile broadband plans has been declining gradually over the last 4 years,from$1.2 in 202021 to$0.8 in 202324.This is slightly less than the$0.9 cost per advertised gigabyte for mobile phone services.Figure 27:Median advertised cost per gigabyte of data for mobile broadband plans,2021 to 2024$1.2$1.0$0.9$0.8$0.0$0.2$0.4$0.6$0.8$1.0$1.2$1.4Jun21Jun22Jun23Jun24PriceSource:ACCC estimates based on information from service provider websites.41ACCC|Communications market report|202320244.ACCC activities4.1 Regulated access to telecommunications 4.1.1 Combined declared services inquiryIn May 2023,the ACCC commenced a combined public inquiry into whether 9 wholesale telecommunications services should continue to be regulated.76 The inquiry considered whether ongoing regulation of these services would promote
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CENTER FOR AUTOMOTIVE RESEARCH1March|2023Naseeb Souweidane Brett SmithState of ADAS,Automation,and Connectivity CENTER FOR AUTOMOTIVE RESEARCH2TABLE OF CONTENTS44555778891010111112131414151616About the AuthorsAcknowledgmentsIntroductionAdvanced Driver Assist Systems(ADAS)OverviewCrash Reduction and SafetyRegulationADAS Naming ConventionsDriver EducationDriver MonitoringBusiness Case and Consumer AcceptanceGoing ForwardAutomated Vehicles(AV)OverviewTimeline EvolutionFrom ADAS to AV:Skipping a StepKey Issues Holding Back DeploymentConsumer:Adoption and Risk ToleranceBusiness CaseModalityOperational Design Domains Condition CENTER FOR AUTOMOTIVE RESEARCH3TABLE OF CONTENTS17181920202121222323242526262728282929 31Scaling Toward Automation:Testing vs Pilots vs Launches Infrastructure Policy and RegulationLiabilityTechnology:Hardware and SoftwareCyber/DataMaintenanceGoing ForwardConnectivityOverviewDSRC vs.CV2XStatus of RegulationInternational Scope of RegulationData PrivacyAlternatives in the Market:Cloud ComputingBusiness Case for Connectivity and the Cost Elements from OEMsBusiness Case for Connectivity in AutomationGoing ForwardConclusionWorks Cited CENTER FOR AUTOMOTIVE RESEARCH4The Center for Automotive Research is an independent non-profit that produces industry-driven research and fosters dialogue on critical issues facing the auto-motive industry and its impact on the U.S.economy and society.CAR researchers closely track current and future global automotive industry and technology trends and assess their impacts.CAR researchers also study international collaborations and stay abreast of changes in international trade and regulatory environments,the development of technology standards,and the deployment of new vehicle technologies.The authors would like to thank Shaun Whitehouse,previous Director of Market-ing and Events at CAR,Carolyn Mozheev,Senior Marketing&Affiliates Program Manager at CAR,Brian Estenberg,Corporate Relations,Research&Strategic Part-nerships at CAR,Edgar Faler Senior Industry Analyst at CAR,and Julia Bush,Indus-try Analyst at CAR,for their assistance in researching,writing,and preparing this document.AcknowledgementsFor citations and reference to this publication,please use the following:Souweidane,N.,Smith,B.(2022).State of ADAS,Automation,and Connectivity.Center for Automotive Research,Ann Arbor,MI.880 Technology Drive,Suite C|Ann Arbor,MI 48108|www.cargroup.orgABOUT THE AUTHORSCARs mission is to produce independent research,convene stakeholders,and analyze critical issues facing the mobility industry and its impact on the economy and society.CENTER FOR AUTOMOTIVE RESEARCH5IntroductionVehicles are currently in a new stage of evolution that includes advanced driver assist,connectivity,and automation.Due to the evolving nature of the technolo-gy and shifting consumer preferences,the timing and pathway for implementa-tion of these technologies is still uncertain.While these new technologies are still evolving,an understanding of the current automotive landscape may help pro-vide a view to future developments.The Center for Automotive Research is committed to informing the public about the current state of vehicle technologies.In 2017,2019,and 2020,CAR published roadmaps describing the current and likely future state of vehicle technologies.To ensure the information forecasted by CAR remained current and reflected the latest in vehicle technologies,trends,and expectations,CAR conducted ongo-ing research and moderated industry roundtables.Industry roundtable experts included auto manufacturers,parts suppliers,technology providers,data provid-ers,autonomous platforms providers,and technology investors.Following the roundtables,CAR developed an updated roadmap and report reflecting industry trends and expectations.This paper summarizes critical issues involving the de-velopment and deployment of technology in advanced driver assistance systems(ADAS),autonomous vehicles(AV),and vehicle connectivity.Advanced Driver Assist Systems(ADAS)OverviewAdvanced driver assistance systems(ADAS)have the potential to reduce crash-es and minimize traffic inefficiencies by eliminating human error and providing real-time data about traffic conditions.The technologies included in ADAS include automatic emergency braking,adaptive cruise control,lane-keeping assist,self-park,and varying automatic emergency braking systems.There is little dispute about the potential benefits of ADAS.Eliminating human error and simplifying driving make ADAS an attractive vision for the future state of automotive technology.However,ADAS are still in their developmental stage,and a handful of highly publicized-and sometimes fatal-crashes have raised con-cerns about the safety of the technology.CENTER FOR AUTOMOTIVE RESEARCH6There is a general lack of data and information to draw robust conclusions about the nature and cause of these crashes,but nevertheless,the negative headlines have tempered enthusiasm for this technology.ADAS technologies,popular for the last two decades,have advanced in four dis-tinct waves:aid features,warn features,driver assist features,and automated driv-ing features.1.Aid features are technologies that enhance driver vision through cameras and lights.Popularized in the early 2000s,aid features have since become com-monplace.2.Warn features include alert systems that utilize sensors and sounds to warn drivers of hazards.These features are regaining focus as they help shape driver monitoring.3.Driver assist features are technologies that help situationally control the vehi-cle.These technologies have been around for decades but advanced signifi-cantly in the late 1990s.Since then,new features have consistently been intro-duced to provide a sophisticated level of driver assistance.Which may serve as the bridge to automated driving features.4.Automated driving features serve as a more advanced driver assist,which takes responsibility and helps drive the vehicle in specific circumstances.Figure 1:Driver Assist Technology Evolution CENTER FOR AUTOMOTIVE RESEARCH7Crash Reduction and SafetyADAS and automated technologies are touted as solutions for crashes and road-way safety because their advanced technology can eliminate human error.The National Highway Traffic Safety Administration(NHTSA)has reported that“94%of serious crashes are due to human error,”supporting the inherent promise of automated and assisted driving(NHTSA,2016).Statistics like this are central to the vision promoting full-scale deployment of automation and driverless vehicles.However,the statistics provided by NHTSA that are core to ADAS adoption are,in some ways,an oversimplified narrative(Mueller et al.,2020).Issues that may arise from ADAS include technology failures,hacking,overreliance on technology to perform beyond intended use(human error),unreliable platooning technology that leads to more severe crashes,an inability to detect vulnerable road users,and decreasing level of investments in ADAS technologies.Despite these potential technological shortcomings,recent studies predict that ADAS technology could reduce up to 34 percent of crashes.Some studies sug-gest this percentage could be even higher if the technology could eliminate traffic violations(Mueller,2020).Reducing auto crashes by just 10%would reduce traffic fatalities by thousands.A trend to consider further is the potential for ADAS to increase travel demand,even if proportionally lowering crash rates,while raising the number of aggregate crashes due to the increased demand from fleets.RegulationWhile there has been no congressional action governing ADAS technology in automobiles,NHTSA,whose regulatory framework remains primarily weighted toward driver-focused safety standards,has started amending its standards and issuing general orders to regulate ADAS.A standing general order was issued by NHTSA that required companies to report a crash if Level 2 ADAS technology was in“use at any time within 30 seconds of a crash and the crash involved a vulner-able road user or resulted in a fatality,a vehicle tow-away,an airbag deployment,or any individual being transported to a hospital for medical treatment”(NHTSA,2021).The standing order aims to evaluate vehicle technologies and serves as a measure of ADAS assessment absent in current FMVSS and NCAP.CENTER FOR AUTOMOTIVE RESEARCH8ADAS Naming ConventionsThere are currently no federally mandated standards to ensure consistent use of terminology for referencing ADAS features like adaptive cruise control,highway pilot,and automated parking.ADAS technology has largely been promoted and described in varying ways by the companies that develop and adopt the technolo-gy in their vehicles(Williams,2022).Without universally accepted nomenclature,companies may promote their ADAS features and technologies using terminology that may not accurately describe the technology suite in their vehicles and may not be commonly understood by con-sumers.Tesla,for example,refers to its ADAS as“Full Self-Driving,”yet it only lands on the second level of the SAEs five automation levels.This lack of consensus has led to a level of consumer misunderstanding and false expectations of the tech-nologys true capability.AAA led a working group to standardize ADAS features and technologies to“clear confusion”surrounding ADAS technology(AAA,2022).The working group sought to provide industry-wide definitions of ADAS technology suites to improve under-standing and transferability of terminology.While there was not uniform agree-ment on the importance of adopting a standardized nomenclature,the prevailing view is that standardization will be a critical factor in promoting and understand-ing ADAS technologies.Standardization will also be an important factor in driver education and technology knowledge transferability.Driver EducationEducating drivers on the proper use of ADAS technologies is an essential step in fully realizing the benefits of ADAS.Misuse and human error may cause crash-es that were otherwise preventable through ADAS technology.Without a proper understanding of when and where technology can be deployed,human error can lead to ADAS failures.A training program to advance the understanding of the ADAS technology used within a vehicle can reduce misunderstanding and misuse of ADAS.Some companies implement training standards for drivers before they are provid-ed access to certain ADAS features(Mayhew&Robertson,2021).These mandatory instructional standards ensure that drivers better understand the capabilities and limitations of the technology in their vehicle.For example,a driver trained on Tes-las ADAS suite would learn that“Full Self-Driving”requires driver engagement CENTER FOR AUTOMOTIVE RESEARCH9and is not fully automated.However,few companies mandate this type of educa-tion(Stafford,2022).Despite the potential benefit of training programs,consumers appear unwilling to spend time learning how to use ADAS.Additionally,the low degree of trans-ferability between manufacturers of technology suites means an investment in learning one manufacturers technology may not be particularly helpful for a dif-ferent manufacturer.Driver MonitoringDriver monitoring is another mechanism that can mitigate the risks associated with misusing ADAS by ensuring drivers are more fully engaged while driving.There are varying degrees of driver monitoring ranging from periodic alerts to required engagement(Barry,2022).The problem with a strict driver monitoring mandate is that it may remove the incentive to fully embrace the technology.If drivers feel monitoring requirements overly restrict their autonomy,they may find little benefit and value in the ADAS.Assuring focus through driver monitoring is a balancing act that companies and governing bodies are currently attempting to manage.Both are trying to ensure appropriate customer use of ADAS while not annoying the driver.Higher-end driver monitoring may result in backlash from consumers over a perceived invasive view and increased potential for cyber threats.Additionally,false positive alerts generated by the driver monitoring system may create a technological challenge that discourages companies from entering this market(Mehmed et al.,2020).A recurring false positive rate could fuel consumer mistrust and misunderstanding of the vehicle which can negatively affect con-sumer adoption and willingness to buy.Roundtable discussions on monitoring systems also highlighted the complexity of monitoring consumer distraction in light of advancements with in-vehicle fea-tures presented through phone connectivity.The European New Car Assessment Programme(Euro NCAP)is currently the lead-er in evaluating driver monitoring standards through a series of orders(McManus,2022).Euro NCAP standards have been instrumental in establishing driver moni-toring standards.In time,more jurisdictions will implement similar standards.CENTER FOR AUTOMOTIVE RESEARCH10The business case for ADAS is currently unclear due to low consumption levels.Pricing models are difficult to establish as many consumers remain skeptical and unwilling to pay for the technology(Stigloe et al.,2022).A better understanding of how many consumers shut off the ADAS features in their vehicles is needed to appropriately model the business case for pricey subscription models.As efficiency of these technologies improves overall,adoption rates are expected to increase(Heineke et al.,2022).There is a belief within the industry that as these technologies gain access to more information and data,their capabilities will vast-ly improve.In turn,the business cases for situations like long drives,and consum-ers looking for relief in arduous commutes will improve.However,standardization,lower prices,and technological improvements will likely be necessary for ADAS to overcome consumer uncertainty.Business Case and Consumer AcceptanceADAS technologies penetration of several markets proves there is a solid near-term business case.However,consumers will require near-term,pronounced im-provements in ADAS for continued market penetration.When implemented correctly,ADAS can provide an attractive incentive to con-sumers.However,adoption of ADAS will not solely come from the excitement sur-rounding the technology.Consumers will need to believe in the practical benefits of ADAS.Safety is a pivotal selling point,but ADAS must also prove it can make the driving experience more manageable and less burdensome.That proof can only occur when consumers properly understand the benefits,which means clearly under-stood and consistent naming conventions for ADAS technologies.Unfortunately,standardization in naming conventions is likely unrealistic in the near term,but names more reflective of the respective technologys ability may enhance the con-sumers ability to understand.Driver education can bridge the gap.If companies are willing to help consumers correctly learn their vehicles capabilities,ADAS use could become more common-place,and less of a feature consumers forget to use(or intentionally turn off).Going Forward CENTER FOR AUTOMOTIVE RESEARCH11Driver monitoring will be an essential piece of regulation to limit the misuse of ADAS.Still,if driver monitoring regulation requires a focus similar to that of driving a traditional vehicle,theres little incentive to use ADAS features.Higher ADAS adoption will likely be limited to conditions and speeds that pose less of a threat when the driver is disengaged.Even if ADAS projects to be limited in its on-road applications,companies will still introduce these technologies.If the costs of ADAS remain high,consumers still have a choice in their vehicle technolo-gies,and the applications remain limited,the market will be narrow.Alternatively,if costs drop and applications increase,standardization is possible by the end of the decade.Automated Vehicles(AV)OverviewVehicle automation,defined as SAE Level 4 and Level 5 technology,is the next phase of automotive driving technologies(SAE,2021).While ADAS represents technologies that partially remove driver responsibility,AVs represent the com-plete shift in control from driver to vehicle.The rationale for focusing on Levels 4 and 5 as distinctly autonomous is that AVs remove the driver.In the mid-2010s numerous forecasts predicted that Level 5 would arrive some-time this decade.But as the years have passed,few,if any companies or studies are projecting full autonomy and unrestricted operational design domains(ODD).Similar to ADAS,AVs have been touted as a solution for safety.Numerous com-panies and studies have also listed AVs as a solution for lower emissions,reduced travel costs,increased productivity,and decreased congestion.While varying degrees of automation are available,high automation for widespread commercial use is currently unavailable.CENTER FOR AUTOMOTIVE RESEARCH12Timeline EvolutionDiffering projections from consultants,industry stakeholders,and academia were reflected in CARs last two iterations of the Technology Roadmap,but since then,all timelines and projections have shifted.Around 2017,when funding for AV was at an all-time high,many consultants,re-searchers,and industry stakeholders projected AV deployment and market pen-etration by 2020(Hawkins,2021).In hindsight,these projections were bullish,and many missed the mark.Reports with projections are now rare,and currently,most consultant reports refer to technological barriers and breakthroughs,with few dates and deadlines.OEMs,technology companies,suppliers,and other stake-holders are projecting milestones in the near term,many of which are incremen-tal and achievable.While academic research was more conservative than consultants and industry stakeholders,they also missed some of their projections and forecasts.Conse-quently,projections have become less frequent and focused primarily on barriers to deployment.All of these projections differ in their levels of automation,base year,rate of mar-ket penetration,and ODD capability.Due to these discrepancies,the aggregation of forecasts is now less straightforward than it had been in the past.While time-lines may be difficult to project,a summary of the issues can provide a roadmap for deployment,and the barriers standing in the way.Source:SAE.(2021,May 3)Figure 2:SAE Levels CENTER FOR AUTOMOTIVE RESEARCH13Industry stakeholders at the roundtable acknowledged these missed projections and gave insight into the most realistic current use cases.With these insights and the aggregation of current studies,it is easier to understand the AV deployment roadmap and obstacles.From ADAS to AV:Skipping a StepWhen AV optimism was at its peak,many companies pledged to go from Level 2 to Level 4,skipping Level 3(Stathousis,2020).However,skipping Level 3 has prov-en to be difficult,in part because in the real world,scaling is the best training.A handful of companies have stuck to that scaling model.Over the last two years,Mercedes-Benz and Honda have introduced Level 3 technologies in their home countries(Sigal,2022).These companies are considered industry leaders,and the first to offer a higher level of ADAS and AV technology to their consumers for pri-vate use.These early innovators of Level 3 technology could trigger widespread offerings of Level 3(as noted by industry participants at the roundtable),or they could remain outliers if companies are unwilling to assume liability.Figure 3:Aggregate AV Projections CENTER FOR AUTOMOTIVE RESEARCH14Others in the industry point to a ten-year transition to Level 3,and the issues that may arise along the way.Level 3 has also been considered much more costly to develop,even at a lower rate,making consumer adoption much less likely.The experts on the panel pushed against the idea that Level 3 will be hard to achieve,but noted that barriers like the costs of additional computing and sensor technol-ogy must be overcome.For these reasons the prevailing sentiment is that Level 2 still has the strongest business case.Key Issues Holding Back DeploymentConsumer:Adoption and Risk ToleranceConsumer skepticism toward AVs is high.The industry must address safety is-sues before consumers consider them a viable solution(Stigloe et al.,2022).While crash rates may not be higher than a traditional vehicle,consumer mistrust of AVs,stoked by publicized crashes and misuse of the technology,has remained con-sistently high over the years.Consumers need to understand and believe AVs are safe before any significant adoption can occur.However,it is unrealistic to think of AVs as infallible and 100 percent safe,so con-sumers will eventually have to accept some level of risk and understand the lim-itations of their vehicle(Litman,2022).At this point,it is uncertain what level of safety is needed(e.g.,10 percent fewer crashes?1,000 fewer crashes per mile driv-en?)before consumers and regulators are convinced that the risks associated with AVs are justified and acceptable.Figure 4:Deployment Barriers CENTER FOR AUTOMOTIVE RESEARCH15Safety is not necessarily the sole sales pitch for AVs.They are also touted as a way to reduce congestion,lower costs,maximize efficiency,and increase productivity(Litman,2022).Maximizing efficiency faces an uphill battle as long as AVs have to share the road with traditional vehicles.An all-AV scenario would likely operate efficiently,but the reality is that they will need to perform with traditional vehicles for the foreseeable future.In the early stages of AV development,there was optimism that AVs would relieve traffic congestion.However,further analysis of modality,demand,and vehicle miles traveled(VMT)projections now challenge this vision(Litman,2022).If in-creased adoption of AVs results in more vehicles being on the road,congestion could actually increase.For example,a private or fleet vehicle may opt to continue driving between drop-off points instead of parking to await the next transaction.Vehicle stalling without a rider is another potential issue that could lead to con-gestion.A selling point for AVs is their applications in ridesharing which could create lower costs compared to private vehicle ownership(Heineke et al.,2022).AV ride-shar-ing should also be cheaper than a traditional taxi because of the lower operating costs.Another selling point of AVs comes from consumers ability to focus on other tasks.Freed from the responsibility of driving,they can now use their phones,eat,or partake in other tasks while traveling.Roundtable participants also noted that trucks and fleets in a geofenced area may now be the most attractive use case for AVs.While AVs hold the possibility of providing convenience and efficiency benefits,it remains to be seen whether these anticipated benefits sufficiently outweigh ini-tial safety concerns in influencing consumer adoption.Business Case CENTER FOR AUTOMOTIVE RESEARCH16As AV testing has progressed,it has become clear that AVs capabilities will be af-fected by the domain in which they operate.Operational Design Domains(ODDs)limit the conditions that a specific type of AV technology can be used(Berman,2019).Technology can be fully autonomous in an ODD but prohibited from operat-ing in certain,outside conditions or environments.The difference between limited ODDs(Level 4)and unlimited ODDs(Level 5)is that limited ODDs prescribes a specific geographical boundary or a set of weather conditions for AV technology operation,while unlimited ODDs has no such constraints-geographical or other-wise.Due to this variability in ODDs,companies may discover that prime conditions for operating an AV are limited to conditions in very specific locations.For this rea-son,many companies are no longer forecasting Level 5.Waymo,Cruise,and other companies are deploying AVs only in Arizona,California,and Texas because they have far few weather-related ODD barriers like significant rain,snow,and clouds(Bellan&Korosec,2022).Roundtable participants shared their insight on the projections and explained that Level 4 is not ready for mixed-use unless the AV is contained in a geofenced area with limited weather hazards.In these narrowly defined ODDs,Level 4 mayOperational Design Domains ConditionVarious projections of AVs have been presented as ridesharing vs.private owner-ship.However,forecasts regarding these consumer patterns have been difficult to quantify with a reasonable degree of certainty.Variables influencing a consumer shift from ownership to ridesharing are complicated.Vehicle ownership is cultur-ally ingrained in the U.S.,making models like ridesharing a more complex selling point(Mohammadzadeh,2021).While many projections for AV pricing suggest AVs will be more costly than tra-ditional vehicles and sold at price points outside the price range of comparable consumer segments,there are questions about consumers willingness to ditch ownership of AVs and share vehicles.Since the pandemic,a decrease in the use of ridesharing suggests that it still faces some adoption challenges.However,if the price is sufficiently enticing,potential users of ridesharing services may be more inclined to use such a service.The low operating costs associated with using an AV for ridesharing may lead to more favorable pricing,shifting consumer preferences toward ridesharing and away from private ownership.Modality CENTER FOR AUTOMOTIVE RESEARCH17be within reach for a commercial fleet model,making it a more likely target for deployments.Scaling Toward Automation:Testing vs Pilots vs LaunchesProgress toward AV rollouts typically occurs through a scaled process and is some-times measured against complete automation(though there are suitable busi-ness cases for lower levels of automation).Due to the variety of methodologies and scaling objectives,it is difficult to assess progress and compare projections.For instance,a company can operate a test operation,a pilot operation,and a commercial operation and each operation may have a certain level of automation in a select ODD,but their scales may differ.Scaling for a pilot differs from Level 4 commercial availability,is different from Level 4 market penetration.These three markers could be years apart because they represent distinctly different mile-stones.Level 4 in restrictive ODDs has already undergone testing,pilots,and commercial launches.These business models range from freight hauling to food delivery ser-vice to last-mile deliveries.Promoting business cases suitable for similar contexts would yield more immediate returns than scaling towards Level 5 in an unlimited ODD with an exceptionally distant timeline.Figure 5:Accomplishments in Deployment CENTER FOR AUTOMOTIVE RESEARCH18Additional business cases have recently undergone pilot launches with automa-tion in trucking and small robotic deliveries in specific ODDs.These business cases have the potential to work under an operation center with human monitor-ing(which may blur the line between Level 3 and Level 4).Nevertheless,such use cases have greater potential for immediate commercial viability than that realized through higher-level automation with unlimited ODDs.InfrastructureAV potential is most significant when operated with other fully autonomous con-nected vehicles on smart highways.However,more realistic adoption patterns suggest that AVs must operate within the existing infrastructure and share road-ways alongside traditional vehicles in the short term.While smart infrastructure will help AVs operate more effectively,advanced infra-structure is not required to effectively operate at certain technology levels(Lit-man,2022).With near term upgrades,existing infrastructure limitations can be overcome to provide an effective AV technology platform.Augmenting sensor technology will likely generate more immediate benefits than developing new technology that relies on connectivity or a smart infrastructure.Even if AVs do not require substantial smart infrastructure investments,many forms of AV technology will benefit from minor infrastructure upgrades to im-prove lane visibility and standardization of markings and maps(Canis,2021).Re-ducing nonstandard and unclear road markings and irregular construction zone variabilities can,for example,improve the effectiveness of AV technologies.Dedicated lanes for trucks and platooning are other examples of infrastructure upgrades that can yield benefits without developing smart highway technology.Additionally,space currently used for parking can be repurposed as drop-off zones for ridesharing AVs.The balance between AV development and infrastructure enhancements requires planning and collaboration between state and private stakeholders.CENTER FOR AUTOMOTIVE RESEARCH19Policy and RegulationBecause the federal government has ceded regulatory power to the states,regu-lation of AVs has primarily occurred at the local level(Canis,2021).However,NHTSA used its guiding documents to help foster state regulation and will continue to work with states to support new regulations(NHTSA,2020).NHTSA is reevaluating conventional statutes from the Federal Motor Vehicle Safety Standards(FMVSS)that do not apply to automated driving technologies.In the Automated Driving System Framework for Safety Standards,NHTSA sought to utilize the New Car Assessment Program(NCAP)to evaluate the AV capabilities of a given vehicle(NHTSA,2020).Because AV technologies do not fit neatly within the FMVSS compliance framework,they issued a limited number of exemptions that allow a company to operate up to 2,500 automated vehicles per year,per company that petitions for use(NHTSA,2022).AVs are mainly deployed at the municipal level,requiring local coordination be-tween companies and local governments.The burden falls on local communities to decide how to equitably implement this emerging technology.There are al-ready examples of AV companies working with a municipality to allow their ser-vice to complement transit(Neef,2021).Some regulatory initiatives will ultimately guide the implementation of AVs,which may come in the form of a Vehicle Miles Traveled Tax,driver monitoring mandate,or policy for crash and traffic decisions.Figure 6:State AV Legislative Action CENTER FOR AUTOMOTIVE RESEARCH20LiabilityLevel 4,and possibly some Level 3 AV technology may shift responsibility and liability from the vehicle owner or driver to the vehicle manufacturer.On the oth-er hand,liability associated with ADAS technology,typically limited to technology that assists the driver,will likely remain with the vehicle owner or driver.In the United Kingdom,highly automated vehicles and their manufacturers are liable,which creates a problem for the producers when deploying vehicles(Bellan,2022).To avoid liability,companies may continue a trend of deploying Level 2 or Level 2 technology for their private vehicles.Currently there is ambiguity in assigning liability between the consumer or the provider when the technology lies between Level 2 and Level 4.At this point,the standards should make the consumers liable in Level 2 vehicles and the providers liable in Level 4 vehicles,while Level 3 is diffi-cult to evaluate.Insurance companies are struggling to gather the data necessary to accurately assess liability and there is currently not enough policy guidance or legal prece-dence to predict likely outcomes.Some companies opt to self-insure,which has made the insurance and liability pathways less clear for an autonomous future(Hall,2022).Technology:Hardware and SoftwareThere is no consensus on technologies needed to best support AV development.AEB,LiDAR,sensors,cameras,ultrasonic,mapping,localization,computational platform,deep-learning,and IMU are examples of technologies used in AVs today.To lower costs,Tesla is already developing a LiDAR-free pathway(Dickson,2021).Other companies are moving away from deep learning due to the difficulty in unpacking the learning data i.e.,it is hard to standardize the foundational pieces and the learning methods.Various organizations assist NHTSA in developing standards to support guidelines that govern automation.For example,NHTSA relied on SAEs levels of automation to define the ADAS technologies used in rulemaking documents and has used these levels to describe the state of the industry in its guiding documents(NHTSA,2022).Additionally,NHTSA used the International Organization for Standardization(ISO)and Underwriters Laboratories(UL)to evaluate ongoing standards in the industry as a foundation for rulemaking.CENTER FOR AUTOMOTIVE RESEARCH21Cyber/DataCybersecurity of autonomous vehicles is a crucial issue as critical data can be-come vulnerable.Hacking is a looming threat,and policy protections for the data are integral to make safeguarding standards.For this reason,some companies are moving away from relying on communication with the local environment.Software updates may be pushed to vehicles without owner approval to ensure safe systems.However,such accessibility to vehicles poses a potential data privacy threat(Canis,2021).Data is valuable to all,but no definitive legislation determines whether consum-ers,automakers,tech companies,urban planners,law enforcement,or insurance has the right to access it(Canis,2021).Presently,rules of data ownership seem to favor automakers,although they acknowledge the difficulty in gathering and using vehicle data-even when doing so can benefit them.Such difficulty demon-strates the limits of data collection and monetization.MaintenanceThe costs of maintaining an AV are significantly higher than a traditional vehicle because the associated hardware and software requires additional maintenance and regular updates(Heineke et al.,2022).A crash or repair may cost more for an AV than a traditional vehicle,which could alter insurance costs.Furthermore,uncertainty surrounding the lifespan of cer-tain technology suites in AVs complicates long-term vehicle cost projections.For example,the lifespan of a sensor may be shorter than other parts of the vehicle,but if the repair costs are too high,a private owner may decide to not repair the vehicle.Fleets,too,will have to take these additional repair costs into account over time(Litman,2022).Unlike private vehicle owners,fleets will also have to account for the costs of clean-ing their vehicles.Ridesharing services that own AV fleets can no longer depend on drivers to be responsible for a clean and operable vehicle,which means they will have to factor in additional costs that are absent in traditional ridesharing ser-vices like Uber and Lyft.Furthermore,without transparency into how deep learning or the hardware is im-plemented,it is hard to determine the root cause of a failure.NHTSAs crash investigation strategy attempts to evaluate these technologies and software mishaps but likely will not paint the complete picture.CENTER FOR AUTOMOTIVE RESEARCH22Going ForwardCreating a“roadmap”for AVs in 2022 has proven to be more challenging than previous iterationsbut likely a more realistic endeavor.The expectations for AVs today are far less optimistic than they were five years ago.In 2017,consultants,technology and vehicle developers,and AI experts were touting a robo-taxi future by 2025.Those voices have gone quiet.Although the expectations for implemen-tation have decreased greatly,nuances allow for a clearer picture of what an AV future may entail.AV progress has slowed,and fewer companies exist today than a few years ago,but work continues.Automation in very limited ODDs is seeing initial application in freight operations and robo-taxi.These initial applications use highly focused,limited ODDs that rely on predictable routes and weather.They present a sensible(if much more mod-est)first use case for automation in transportation and offer a“win”for developers.Currently,most AV fleet operations are located in highly predictable(or at least highly studied)environments,such as Arizona,California,and Texas.None of these initial test cases yet support a scale to be deemed anything near“market accep-tance,”but they may present first steps in what many now expect to be a very long process.Each of these early test cases will be challenged to gain scale with-in the ODD,and may be even more challenged in transferring those learnings to other ODDs.Figure 7:Approximate Deployment Projections CENTER FOR AUTOMOTIVE RESEARCH23While there are some early,very ODD-limited fleet AV applications,developers appear much less interested in AVs for non-fleet consumers in the coming years.Costs associated with full AV technology continue to be well above the price-points consumers would likely tolerate.However,some manufacturers continue to develop a near-term fully self-driving future for consumers.The regulatory structure has adjusted to allow for AVs,but it likely will not change further until AVs prove more viable.State policies may stagnate as technology development stalls and federal policy could remain limited if development fails to progress significantly.The rush to be the first to create AV-specific policies has slowed and will likely continue at a much more measured pace in the coming years.While it is useful for governments to assess the needs and opportunities of AV technology,there is a growing agreement that there is ample time to consider and develop the most effective strategies.ConnectivityOverviewConnectivity,specifically V2X applications,has been projected as an essential factor for optimizing vehicle mobility and augmenting automation.V2X applica-tions include Vehicle-to-vehicle(V2V),Vehicle-to-infrastructure(V2I),and Vehi-cle-to-network(V2N).Potential forms of optimization include better traffic flow,crash detection,re-duced fuel consumption,and enhanced self-driving features(Neumann,2019).These efficiencies can also improve highway safety,thus making the business case for them appealing.Connectivity can apply to many use cases for vehicles,some of which use con-nectivity through cellular networks.Advanced V2X systems rely on roadside units(RSUs)and have their dedicated spectrum.Of the advanced V2X systems,two forms have emerged as the prominent technologies,Dedicated Short Range Communication(DSRC)and Cellular Vehicle to Everything(C-V2X)(Canis&Galla-gher,2021).Many AV companies are avoiding investments in C-V2X or DSRC technology in the near term because of regulatory uncertainty and potential data exposure.Another reason for hesitancy in adoption is that connected technology works best when CENTER FOR AUTOMOTIVE RESEARCH24there are many other connected vehicles and a robust connected infrastructure both of which are currently lacking.Cloud-based connectivity may get more investment if it can provide companies with similar results,at a lower price point,than either DSRC or C-V2X.While safety was the original selling point for connectivity,there are more busi-ness cases,including data collection for auto manufacturers.DSRC vs.CV2XDSRC is an initial Wi-Fi-based vehicle communication mode that does not rely on cellular networks(Gettman,2021).DSRC was allocated spectrum in 1998 by the Federal Communications Commission(FCC),in consultation with the Department of Transportation(DOT).Over the past 20 years,DSRC has been installed in many cars and trucks to optimize vehicle communication under this federal guidance and has been the predominant vehicle communication technique,receiving in-vestments from industry,federal,and state governments.C-V2X was a vehicle technology developed in 2017,and unlike DSRC,can connect 4G and 5G networks.For these reasons C-V2X received backing from telecommu-nications providers and technology companies.At the time of its inception,there were fewer standards and procedures for C-V2X because it was still in its develop-mental stage.Figure 8:Vehicle Connectivity Global History CENTER FOR AUTOMOTIVE RESEARCH25Status of RegulationIn 2016,the Obama administration proposed a V2V mandate using DSRC.The proposal never passed and lost momentum as administrations changed.In 2020,the FCC announced in a Notice of Proposed Rulemaking(NPRM),that parts of the 5.9GHz spectrum that at the time was allocated for DSRC,would be opened up for use by Wi-Fi and C-V2X devices(Canis&Gallagher,2021).The FCC justified the action based on an underutilization of DSRC,while the DOT pushed back,citing concerns based on long-term investment in DSRC.In early June,the FCC sought to comment on the spectrums reallocation.Discussions centered around reim-bursements to parties affected by the spectrum shift.Approaches to reimburse-ment varied,but most commentators supported the idea(McCurdy,2022).The Advanced Transportation Technologies and Innovative Mobility Deployment(ATTIMD)Program is a federal grant program with funding dedicated to retrofit-ting DSRC to C-V2X.The federal Carbon Reduction Program also has stipulations supporting this retrofitting.There are still entities fighting for DSRC beyond reim-bursements because of the investment precedent,and these challenges have oc-curred at the legal level.Recently a court approved the FCCs decision to reassign the 5.9 GHz band(Gitlin,2022).Despite the fights and regulatory battles,the ruling likely marks the end of DSRC in the U.S.and will make C-V2X the only choice for advanced V2X technology.Figure 9:Vehicle Communication ModesSource:Canis,B.(2021,April 23)CENTER FOR AUTOMOTIVE RESEARCH26International Scope of RegulationChina has made C-V2X mandatory,which could spur the adoption of vehicle com-munication.Chinas centralized regulatory structure shortens the implementation period for C-V2X,with estimates that up to 78%of all V2X in China will have C-V2X technology by 2025(Berg,2021).Automakers in China quickly reacted to the regulatory adoption standards by deploying C-V2X in their vehicles.There are estimates that up to 50%of new cars sold in China will have C-V2X capability by 2025.Like the U.S.,the European Union(E.U.)connectivity regulations have been in flux.They have yet to determine their predominant form of vehicle connectivity,taking a neutral approach in the DSRC and C-V2X debate and allowing both to operate.Eventually,the E.U.will have to choose a technology or risk interoperability issues.Japan and South Korea are taking a similar approach to the E.U.as they test both technologies in their respective jurisdictions(Canis&Gallagher,2021).Data privacy standards and regulations are still in their developmental stage in the U.S.,complicating the vehicle technology implementation process.While Chi-na has a strict regulatory policy to promote government data access and the E.U.conversely has consumer data safeguards,the U.S.is still without a Data PrivacyFigure 10:Spectrum MethodsSource:Canis,B.,&Gallagher,J.C.(2021,April 21)CENTER FOR AUTOMOTIVE RESEARCH27comprehensive regulatory basis for its data management(Mulligan&Linebaugh,2019).Since the business case for data collection focuses on near-term benefits,sub-stantial federal regulatory standards will need to follow if companies hope to manage and monetize driver data.As seen in the E.U.,there will likely be internal jockeying within the industry for data rights in the U.S.,which will be a competi-tion between manufacturers,technology companies,insurance companies,and the states(Cohn&Jones,2022).These stakeholders are currently lobbying for their respective access to the data and carving out rules in their favor(Mitchell,2021).However,most of these policies,like the proposed American Data Privacy and Pro-tection Act(ADPPA),are data agnostic and do not address vehicles specifically.California is an early actor in this space as the federal government still develops a framework.The California requirements may provide the manufacturers with a guiding principle before they build business models on data monetization.From a consumer standpoint,there will be concerns about data access and privacy that may hinder the business model for connectivity.If consumers are hesitant to give up their data and have no financial,regulatory,or safety incentive,the business case for manufacturers will come into question(Dyson&Ross,2022).At this point,auto companies are creating financial and insurance incentives if consumers are willing to hand over data which may be the business case for data monetization(Hall,2022).Alternatives in the Market:Cloud ComputingV2X technology has improved,but cloud-based connectivity and telematics tech-nologies are currently available that promote connectivity without the same regu-latory and cost burden as C-V2X and operate independently of the roadside units(RSU)found in C-V2X and DSRC technologies(Neumann,2019).Roundtable input made clear that the lower costs associated with these applica-tions are an appealing alternative to auto companies because they do not need the same regulatory approval as other V2X technologies.Additionally,these alter-nate forms of connectivity ensure communication and data remain within a man-ufacturers desired network.The combination of a localized network and limiting vehicle communication avoids the threat of privacy breaches and data vulnera-bility.According to industry participants,these cloud-based vehicle technologies are more advanced than C-V2X technologies and offer solutions like evaluation of vehicle operability.CENTER FOR AUTOMOTIVE RESEARCH28These cloud-based technologies may temporarily cause adoption to diverge from both of the FCCs regulatory choices(Brady,2022).Even before regulation is com-plete,automakers are adopting alternate solutions that may have a more immedi-ate and practical impact.Initially,the value proposition for connected vehicles and V2X was safety and the subsequent optimization of a connected fleet.Since then,the value proposition has changed from safety where there was a struggle to rely on connectivity to make all safety decisions-to manufacturers,who recognize the value of vehicle data(Hall,2022).Despite safety not providing the sole business case,OEMs realized the value of data and the need to collect it in order to effectively evaluate the vehicles func-tionality through cloud computing.Even without C-V2X and DSRC,there is still data collected on driving patterns with cloud-based connected vehicle technol-ogy.Cloud-based technology may have lower cost barriers and regulatory uncer-tainty than C-V2X and DSRC,but manufacturers will still need to manage several cost elements to ensure adequate network speed across all locations.Manufacturers will also need to determine the cost elements for the rollout of their technology.Industry experts from the roundtable indicated that in these cases,auto manufacturers might opt to manage their own 5G networks,which could be the lowest-cost solution.Business Case for Connectivity and the Cost Elements from OEMsConnectivity can augment automated vehicles in specific applications like pla-tooning and fleet operations(Brown et al.,2021).These applications can offer enhanced safety under certain circumstances,even if connectivity rollout is inde-pendent of automation and vice versa.Particular ecosystems,(e.g.,fleets)may be significant contributors to enhanced safety via connected applications and exper-iments with rollouts.As markets evolve,some ecosystems will prove more advan-tageous than others and adoption will be driven by the best business case.Presently,cloud-based connectivity is the foundation for AV data evaluation.Data may prove to be a significant cost barrier due to insurance implications currently preventing AV companies from allowing vehicle communication.Data breaches will also drive up the cost of insurance of AV vehicles,thus motivatingBusiness Case for Connectivity in Automation CENTER FOR AUTOMOTIVE RESEARCH29Going ForwardInnovation and regulation have altered the connectivity path in the last few years.V2X technology development and adoption will likely succeed most in countries with highly centralized regulatory processes like China.Conversely,V2X adoption in the US will remain limited because of regulatory uncertainty,business case validity,and data concerns.Regulations like the ADPPA may allay auto manufac-turers data concerns surrounding V2X technologies.Court rulings affirming C-V2X may also help auto manufacturers move past the phase of regulatory uncertainty but there should be no expectation that auto manufacturers will implement these V2X technologies in the near-term.For the foreseeable future,it is reasonable to assume that auto manufacturers willopt for cloud-based connectivity to avoid data exposure and regulatory challeng-es.In the near term,data monetization will present a clear business case through cloud-based connectivity.In the long term,vehicle automation and freight pla-tooning will offer a favorable business case through V2X.Until there are higher adoption rates of V2X technologies,incentives to implement V2X will be absent.Since cloud-based connectivity is already advanced and has lower cost barriers than V2X,auto manufacturers should expect to invest in these applications in the panies to restrict connectivity to internal loops,and performance evaluation to the present case(Dyson&Ross,2022).As federal standards and communication technologies develop,the business case for vehicle communication will become more lucrative.The communication busi-ness case will enable platooning,fleet operations,crash reduction,and congestion mitigation,but cloud-based connectivity will be the dominant vehicle communi-cation platform in the present term.The landscape for these vehicle technologies has changed in the last few years as ADAS,automation,and connectivity have matured.The roadblocks to the wide-spread adoption of ADAS include a lack of standardization,high prices,and con-sumer uncertainty.Overcoming these barriers to ADAS adoption will likely occur by educating consumers on how to use the technology,prices becoming more Conclusion CENTER FOR AUTOMOTIVE RESEARCH30accessible,and the technological benefits being apparent.AVs face challenges in reaching widespread market penetration,but as development has progressed over the past few years,the obstacles are easier to identify.The implementation of AVs is currently incremental and targeted toward specific ODDs,which makes their near-term implications more predictable.If the fleets of AVs prove to have success in their limited ODDs,deployment could scale to new domains.How-ever,as development has stalled,regulators and investors have tempered their expectations for high automation coming imminently,allowing the industry to make progress before altering policy strategies or investments any further for AVs.Vehicle connectivity has also faced changes due to regulatory and technological uncertainty.Advanced V2X technologies like C-V2X and DSRC are limited in ap-plication because of data concerns,lack of infrastructure,and regulatory irregu-larity.Despite these advanced V2X technologies stagnating,the auto industry has quickly adapted to regulatory uncertainty and adjusted to provide a near-term business case for connectivity through applications like cloud-based connectivity.The perseverance in finding ways to implement connected vehicle technologies comes from their benefits,like vehicle performance evaluation,safety,and data monetization.With time,advanced V2X technologies may supplant cloud-based technologies,but cloud-based technologies ensure a present-day business case.While the development of ADAS,automation,and connectivity has been more complex than predicted years ago,there are current use cases for all,even if some are limited.Development leading to the widespread use of ADAS,high-function-ing level 4 AV fleets,and adoption of C-V2X remain uncertain,but the barriers to getting there are now visible.CENTER FOR AUTOMOTIVE RESEARCH31AAA,SAE,Consumer Reports,J.D.Power,National Safety Council,&PAVE.(2022,June 25).Clearing the confusion-AAA newsroom.Retrieved October 4,2022,from https:/ ing-the-Confusion-One-Pager-New-Version-7-25-22.pdf AAA.(2019,October).Automatic emergency braking with pedestrian detection-AAA.American Automobile Association.Retrieved October 4,2022,from https:/ an-Detection.pdf Barry,K.(2022,February 17).Driver Monitoring Systems Can Help You Be Safer on the road.Consumer Reports.Retrieved October 5,2022,from https:/www.consumerreports.org/car-safety/driver-monitoring-systems-ford-gm-earn-points-in-cr-tests-a6530426322/Becker,J.(2020,October 5).A brief history of automated driving-part three:To ward product development.Apex.A.I.Retrieved October 4,2022,from https:/www.apex.ai/post/a-brief-history-of-automated-driving-part-three-to ward-product-development Bellan,R.(2022,August 22).Human drivers in U.K.wont be liable for accidents when vehicle is self-driving.TechCrunch.Retrieved October 5,2022,from https:/ man drivers in UK wont be liable for,when ve hicle is self-driving&text=Manufacturers operating self-driving vehicles,self-driving vehicles by 2025.Bellan,R.,&Korosec,K.(2022,May 17).Argo AI launches driverless autonomous ve hicle testing in Miami,Austin.TechCrunch.Retrieved October 5,2022,from https:/ hicles-miami-austin/Beresford,C.(2021,November 29).Honda legend Sedan with level 3 autonomy available for lease in Japan.Car and Driver.Retrieved October 4,2022,from https:/ omy-leases-japan/Works Cited CENTER FOR AUTOMOTIVE RESEARCH32Berg.(2021,July 31).The Chinese market is expected to lead the development of V2X.Berg Insight.Retrieved October 5,2022,from https:/ 22).Autonomous Vehicle Operation Design Domain is key to safety.SAE International.Retrieved October 5,2022,from https:/www.sae.org/news/2019/11/odds-for-av-testingBlanco,S.(2021,November 29).IIHS:Rear Automated Emergency braking is stand out safety feature.Car and Driver.Retrieved October 4,2022,from https:/ 25).Americas first 5G connected car is here and its electric!Clean Technica.Retrieved October 4,2022,from https:/cleantechni 19).To break an impasse in connected vehicle tech,transportation leaders call for a federal policy framework.Smart Cities Dive.Retrieved October 4,2022,from https:/ Future of the E.U.Automotive Sector.Eu ropean Parliament.Retrieved October 5,2022,from https:/www.europarl.europa.eu/RegData/etudes/STUD/2021/695457/IPOL_STU(2021)695457_ EN.pdfCanis,B.(2021,April 23).Issues in Autonomous Vehicle Testing and Deployment.Congressional Research Service.Retrieved October 4,2022,from https:/crsreports.congress.gov/product/details?prodcode=R45985 Canis,B.,&Gallagher,J.C.(2021,April 21).Smart Cars and Trucks:Spectrum Use for Vehicle Safety.Congressional Research Service.Retrieved October 4,2022,from https:/crsreports.congress.gov/product/pdf/IF/IF11260 C.B.Insights.(2021,November 23).The partnerships shaping the future of autonomous driving.C.B.Insights Research.Retrieved October 4,2022,from https:/ FOR AUTOMOTIVE RESEARCH33Cohn,C.,&Jones,H.(2022,March 31).E.U.weighs driver data rules,pitting insurers against Auto Giants.Reuters.Retrieved October 5,2022,from https:/ ting-insurers-against-auto-giants-2022-03-31/CVEL.(2017).Lane Keeping Assist.Clemson Vehicular Electronics Laboratory:Lane keeping assist.Retrieved October 4,2022,from https:/cecas.clemson.edu/cvel/auto/systems/lane-keeping-assist.htmlCVEL.(2021,November).Blind Spot Detection.Clemson Vehicular Electronics Laboratory:Blind spot detection.Retrieved October 4,2022,from https:/cecas.clemson.edu/cvel/auto/systems/blind-spot-detection.html#:text=In 2011, Infiniti introduced two,collision is likely to occur.Dickson,B.(2021,July 3).Tesla AI chief explains why self-driving cars dont need lidar.VentureBeat.Retrieved October 5,2022,from https:/ 1).Private Autonomous vehicles:The other side of the Robo-Taxi Story.McKinsey&Company.Retrieved October 5,2022,from https:/ Dori Slosberg Foundation.(2022).Five eras of safety:Autonomous Vehicles.The Dori Slosberg Foundation.Retrieved October 5,2022,from https:/dorisaveslives.org/resources/technology/autonomous-vehicles/five-eras-of-safety.htmlDyson,B.,&Ross,H.(2022,May 31).Data Access among top concerns as insurers await Autonomous Cars.S&P Global.Retrieved October 4,2022,from https:/ 22).5 predictions about 5G adoption in 2022 and beyond.WhatI.Retrieved October 4,2022,from https:/ CENTER FOR AUTOMOTIVE RESEARCH34Future Market Insights Global and Consulting Pvt.Ltd.(2022,May 3).The global adas market is expected to reach US$131.0 bn by 2032:Adas Industry Innovation,Technologies,size,trends and forecast.GlobeNewswire News Room.Retrieved October 5,2022,from https:/ 12).DSRC and C-V2X:The future of connected vehicles:Kimley-Horn.Kimley Horn.Retrieved October 5,2022,from https:/www.kimley- 1).Trump administration reportedly kills vehicle-to-vehicle safety mandate.ARS Technica.Retrieved October 4,2022,from https:/ AP report,short-range alerts between vehicles.Gitlin,J.(2022,August 16).Court rules FCC is allowed to reassign 5.9 GHz band width,killing V2x.Ars Technica.Retrieved October 4,2022,from https:/ars Serulle,N.(2021,March).Impacts of Automated Vehicles on Highway Infrastructure.FHWA DOT.Retrieved October 5,2022,from https:/www.fhwa.dot.gov/publications/Hall,K.(2022,August 30).Automakers pitch:Save On Insurance by giving us your driving data.The Detroit News.Retrieved October 5,2022,from https:/ 7).The Autonomous Vehicle World is shrinking.The Verge.Retrieved October 5,2022,from https:/ 22).Whats next for autonomous vehicles?McKinsey&Company.Retrieved October 4,2022,from https:/ CENTER FOR AUTOMOTIVE RESEARCH35Heineke,K.,Kampshoff,P.,&Heuss,R.(2022,January 4).The road to Affordable Autonomous Mobility.McKinsey&Company.Retrieved October 4,2022,from https:/ 19).Its official:DSRC is out,C-V2X and Wi-Fi-sharing is in at 5.9 GHz.RCR Wireless.Retrieved October 4,2022,from https:/ 5).National Security Implications of Fifth Generation(5G)Mobile Technologies.Congressional Research Service.Retrieved October 4,2022,from https:/crsreports.congress.gov/product/pdf/IF/IF11251Hsueh,P.(2021).V2X use case studies and Test Solutions Overview.Anritsu Taiwan.Retrieved October 5,2022,from https:/ 1).FCC rubber-stamps U.S.spectrum for C-V2X as Europe an Trials Motor Ahead.ReTHINK.Retrieved October 4,2022,from https:/re thinkresearch.biz/articles/fcc-rubber-stamps-us-spectrum-for-c-v2x-as-european-trials-motor-ahead/IANS.(2021,July 10).U.S.to see 80 million connected cars by 2025,5G vehicles to lead-et auto.ETAuto.Retrieved October 4,2022,from https:/auto.eco 4).A History of ADAS:Emergence to essential.IDTechEx.Retrieved October 4,2022,from https:/ le/a-history-of-adas-emergence-to-essential/25592Kaitwade,N.(2022).Automotive Adas(advanced driver assistance systems)market.Future Market Insights.Retrieved October 4,2022,from https:/ 3).Autonomous Vehicle Implementation Predictions.Victoria Transport Institute.Retrieved October 4,2022,from https:/vtpi.org/avip.pdf CENTER FOR AUTOMOTIVE RESEARCH36Marshall,A.(2018,May 29).False positives:Self-driving cars and the agony of knowing what matters.Wired.Retrieved October 5,2022,from https:/ 6).The future of driver education-move magazine-aamva.Move Magazine-AAMVA.Retrieved October 5,2022,from https:/www.movemag.org/the-future-of-driver-education/McCurdy,B.(2022,June 10).A Perspective on the FCCs Proposed Reallocation of the 5.9GHz Spectrum.Update.McManus,A.(2022,September 14).How euro NCAP will make Driver Monitoring Systems the new Safety Standard.Smart Eye.Retrieved October 5,2022,from https:/smarteye.se/blog/how-euro-ncap-will-make-driver-monitoring-systems-the-new-safety-standard/Mehmed,A.,Steiner,W.,&auevi,A.(2020,November 30).Systematic False Positive Mitigation in Safe Automated Driving Systems.IEEE.Retrieved October 5,2022,from https:/ Systematic_False_Positive_Mitigation_in_Safe_Automated_Driving_SystemsMercedes-Benz USA.(2022,March 20).Mercedes-Benz and Bosch Showcase Automated Valet parking at Intercontinental Los Angeles Downtown Hotel.MBUSA Newsroom.Retrieved October 4,2022,from https:/ 31).Autonomous Car Developers Lobby to Defang Safety Data Regulations.Los Angeles Times.Retrieved October 5,2022,from https:/ or owning autonomous vehicles?Comprehending the role of ideology in the adoption of autonomous vehicles in the Society of Automobility.Transportation Research Interdiscplinary Perspectives,9,100294.https:/doi.org/10.1016/j.trip.2020.100294 CENTER FOR AUTOMOTIVE RESEARCH37Mudge,R.R.,&Kornhauser,A.(2021).Automated Vehicle Systems Outlook,2021.Society of Actuaries.Retrieved October 4,2022,from https:/www.soa.org/globalassets/assets/files/resources/research-report/2021/automated-vehicle-systems-outlook.pdfMueller,A.(2020,June 4).Self-driving vehicles could struggle to eliminate most crashes.IIHS.Retrieved October 5,2022,from https:/www.iihs.org/news/detail/self-driving-vehicles-could-struggle-to-eliminate-most-crashesMueller,A.S.,Cicchino,J.B.,&Zuby,D.S.(2020).What humanlike errors do autonomous vehicles need to avoid to maximize safety?Journal of Safety Research,75,310318.https:/doi.org/10.1016/j.jsr.2020.10.005Mulligan,S.P.,&Linebaugh,C.D.(2019,March 25).Data Protection Law:An overview.Congressional Research Service.Retrieved October 5,2022,from https:/crsreports.congress.gov/product/pdf/R/R45631Neef,D.(2021,July 22).When it comes to autonomous vehicles,its time municipalities got into the drivers seat.American City and County.Retrieved October 5,2022,from https:/ 11).Seven automotive connectivity trends fueling the future:Jabil.J.Retrieved October 4,2022,from https:/ assistance technologies.NHTSA.Retrieved October 4,2022,from https:/www.nhtsa.gov/equipment/driver-assistance-technologiesNHTSA.(2021,June 29).NHTSA orders crash reporting for vehicles equipped with advanced driver assistance systems and Automated Driving Systems.NHT SA.Retrieved October 5,2022,from 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propulsion:Semi-autonomous,fully autonomous;by vehicle:Passenger Car,commercial vehicle)-global industry analysis,size,share,growth,trends,regional outlook,and forecast 2022-2030.Precedence Research.Retrieved October 5,2022,from https:/ 17).Autonomous Vehicle Partnership Map.PTOLEMUS Consulting Group.Retrieved October 4,2022,from https:/ 31).A brief history of the high-tech safety features in your car.Automoblog.Retrieved October 4,2022,from https:/ and Markets.(2021,August 23).The future of V2X communications:Number of cars on the road equipped with V2X capabilities forecast to reach 35.1 million by 2025.GlobeNewswire News Room.Retrieved October 4,2022,from https:/ and Markets.(2022,June 1).Global Autonomous Vehicles Market(2022-2030)-projected CAGR of 53.6%during the forecast period.GlobeNewswire News Room.Retrieved October 4,2022,from https:/ CENTER FOR AUTOMOTIVE RESEARCH39SAE.(2021,May 3).SAE levels of Driving Automation refined for clarity and international audience.SAE International.Retrieved October 5,2022,from https:/www.sae.org/blog/sae-j3016-updateSalomon,S.(2016,February 23).Drivers guide:What you need to know about Rear Cross traffic alerts.B.Retrieved October 4,2022,from https:/ 27).Study:Global adas market project to reach$57 billion by 2030.Specialty Equipment Market Association(SEMA).Retrieved October 5,2022,from https:/www.sema.org/news-media/magazine/2022/10/study-global-adas-market-project-reach-57-billion-2030#:text=Current ly valued at $12.7 billion,originally reported by Aftermarket News.Shepardson,D.(2022,August 12).U.S.court upholds FCC reallocation of Auto Safety Spectrum.Reuters.Retrieved October 4,2022,from https:/ 6).Mercedes opens sales of level 3 self-driving system on S-class,EQS.Automotive News Europe.Retrieved October 5,2022,from https:/ vehicle market size,share,value,report,growth.Allied Market Research.Retrieved October 4,2022,from https:/ future of Intelligent Transportation Systems(ITS):Applying lessons learned from 30 years of Innovation.The Future of Intelligent Transportation Systems(ITS):Applying Lessons Learned From 30 Years of Innovation|FHWA.Retrieved October 5,2022,from https:/high ways.dot.gov/public-roads/spring-2022/03Stafford,E.(2022,April 19).G.M.Patents Autonomous Tech to train new drivers Sans Instructor.Car and Driver.Retrieved October 5,2022,from https:/ FOR AUTOMOTIVE RESEARCH40Stathousis,G.(2020,February 9).Another carmaker skips level 3 automated driving.LinkedIn.Retrieved October 5,2022,from https:/ 27).Timeline:Milestones in Adas before 2010.ADAPT Automotive.Retrieved October 4,2022,from https:/ 9).Driverless futures?Science and Technology Studies.Retrieved October 5,2022,from https:/driverless- 2).Connected vehicles:V2V and v2i road weather and traffic communication using Cellular Technologies.Sensors(Basel,Switzerland).Retrieved October 5,2022,from https:/www.ncbi.nlm.nih.gov/pmc/articles/PMC8838867/Wayland,M.(2022,March 11).U.S.clears way for truly driverless vehicles without 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