The ACCC has announced that there will be changes to the regulation of wholesale telecommunications following the release of its final inquiry report.
The inquiry examined whether or not nine wholesale telecommunications services should continue to be regulated. Access to telecommunications services in Australia is usually unregulated, unless the services are declared.
In deciding whether to declare a service, the ACCC must be satisfied that declaration would promote the long-term interests of Australians.
The nine declared services subject to the inquiry were:
- Domestic transmission capacity service
- Wholesale line rental
- Local carriage service
- Wholesale asymmetric digital subscriber line (ADSL) service
- Unconditioned local loop service
- Line sharing service
- Fixed originating access service
- Fixed terminating access service
- Domestic mobile terminating access service
The ACCC examined how recent developments, including the completion of the NBN and declining use of Telstra’s copper network, have changed how telecommunications services are accessed. It also looked at whether competition is protecting Australians who use these services.
The ACCC has decided it will allow the currently declared unconditioned local loop and line sharing services to expire on 30 June 2024.
ACCC Commissioner, Anna Brakey, said, “While these two legacy network access services once enabled greater competition on Telstra’s fixed line network, the number of consumers and businesses using them today is fast approaching zero due to migration to networks such as the NBN.”
The ACCC’s inquiry found that other parts of Telstra’s fixed line network continue to show bottleneck and natural monopoly characteristics for voice and broadband services, particularly in regional and remote areas, as well as areas outside the NBN fixed line network.
The ACCC has therefore decided that it will extend the declarations of wholesale line rental, the local carriage service and the wholesale ADSL service for a further five years, with no variations to the service descriptions.
“In the absence of alternative services that can compete as close substitutes to these fixed line services, we decided that extending their declarations was in the long-term interests of consumers. These services will promote competition outside the NBN fixed line network,” Ms Brakey said.
The ACCC has also decided that while it will extend the declaration of the domestic transmission capacity service for a further five years, it will remove regulation in geographic areas where competition is effective.
“Competition in regional and remote areas is often limited due to the significant initial investment needed to set up transmission capacity infrastructure,” Ms Brakey said.
“Continuing to regulate transmission capacity infrastructure will not only promote competition in regional and remote areas but will likely lead to more efficient use of this infrastructure.”
The ACCC has decided that it will simplify the domestic transmission capacity service description, so it more accurately reflects technology changes since the last declaration inquiry.
The ACCC has also decided that it will extend the declaration of the fixed originating and terminating access services until 30 June 2029. These services support voice calls made to and from fixed line voice networks.
“As there are no close substitutes to fixed line voice services, declaring the fixed originating and terminating access services will promote competition by preventing fixed network operators from exercising market power in setting unreasonable terms of access,” Ms Brakey said.
The service descriptions for the fixed originating and terminating access services will be varied to reflect industry developments since the last declaration inquiry.
A further report on the ninth wholesale service reviewed, domestic mobile terminating access service, will be released separately. The ACCC anticipates publishing this report by June 2024.
