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Telecommunications ACCC decision a blow to Telstra's competitors
Telecommunications ACCC decision a blow to Telstra's competitors | ACCC decision a blow to Telstra's competitors |
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| by Stuart Corner | |
| Friday, 15 August 2008 | |
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Page 2 of 2 Telcos that want to provide telephone services - other than by simply reselling a Telstra service - install their own switches in central locations and buy transmission capacity from Telstra to connect these to Telstra's exchanges. Both these services are 'declared' which means that Telstra must supply them to competitors and a rates supposedly comparable to those charged to its own internal operations. Competing telcos, however have another option: the unconditioned local loop service (ULLS) under which they get access to the basic copper connecting each subscriber, But to use this they must install equipment in the Telstra exchange to power and deliver signals over that copper: DSLAMs or multiservice access nodes which are able to support both DSL and telephony services. In July 2007 Telstra applied to the ACCC to have declaration of LCS and WLR removed in 371 exchanges and followed this up with a second application for another 16 exchange in October 2007. Telstra argued that, in these exchanges there was already one competitor with equipment installed and able to make use of the ULLS and that the continuation of its obligation to supply LCS and WLR would lead to a reduction in the intensity of competition, while the granting of the exemption applications would encourage investment in competing infrastructure (ie more competitors would install DSLAMs and take the ULLS instead of the LCS and WLR services) thereby increasing facilities based competition, deemed to be superior because it increases the range of choices available to consumers. After much deliberation and in the face of strident opposition from Telstra's competitors the ACCC has to a large extent agreed with Telstra, granting the exemption in some 248 exchanges, being those with at lease 14,000 active lines or those with infrastructure provider by four separate carriers, including Telstra. The ACCC says that granting exemption from declaration of in these exchange "will promote facilities based competition by encouraging greater investment in competing infrastructure." However in many exchanges competitors are unable to install infrastructure because the exchange is capped (ie there is not space) and in some other competitors are queuing up to get in. The ACCC has imposed conditions on its exemption designed to accommodate these problems. The CCC claims these will nothing to address these problems and will simply give Telstra more opportunity to exploit the letter of rules and frustrate their intent. According to the CCC, "Rather than accept that it made a mistake in its draft decision earlier this year, the ACCC has added layers of unworkable regulation to pay lip service to the evidence presented by competitors that this was an illogical decision that would be easily exploited by Telstra."
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