ACCC to narrow scope of declared transmission service

Stuart Corner
Thursday, 12 February 2009 01:41

IT Industry - Market

The ACCC is proposing to vary the declared domestic transmission capacity service (DTCS) to exclude large number of capital-regional transmission routes and exchange service areas .

The areas to be excluded from the proposed declaration are the same as those that the ACCC previously determined should be exempt from the current declaration when it issued, in November 2008, its final determination on Telstra's request for exemptions.

All in all transmission on nine capital-regional routes, inter-exchange transmission in 16 CBD exchange service areas and inter-exchange transmission in 72 metropolitan exchange service areas will be removed from declaration.

The ACCC also proposes to extend the varied declaration for five years to "promote regulatory certainty for access seekers and access providers." The ACCC's views are set out in a draft declaration report. It is seeking comment on the draft by 4 March 2009.

The decision follows release of a discussion paper last November which received responses from AAPT, Optus Telstra and Vodafone. AAPT wanted the declaration extended for only three years. Vodafone wanted five, but made no comment on the exemptions already granted.

AAPT worried about Queensland
In its submission AAPT did not oppose incorporating the exemptions into the revised declaration, with the exemption of certain Queensland routes. It said: "The Commission considered that the presence of Queensland Rail, Optus and Telstra on the Brisbane – Bundaberg route meant that that route was competitive. In fact both the Queensland Rail and Optus fibre run along the same path, ie the railway line.

"When buying significant long haul capacity from either Queensland Rail or Optus it is very important to also buy a redundant path (eg in the advent of a rail accident, the last thing repaired is the communications facilities that run along those rail lines). This effectively means that there are only two long haul providers on the Brisbane – Bundaberg route, not three as assumed by the Commission."

Optus supported the exemptions but cautioned the ACCC on any further relaxation saying "Optus believes the Commission must continue to be mindful that in encouraging access seekers to move up the 'rungs' of investment, it must be careful not to remove rungs prematurely as this could leave access seekers in a very weak position compared to infrastructure owners...The Commission must be completely 'on top of what is happening in the market' and acutely aware of the precise market conditions that exist before being in a position to undertake further deregulation of the DTCS."

Five years is too long, says Telstra
Telstra wanted the declaration extended by only 16 months to bring its expiry date into line with the proposed timing of the rollover of the re-declaration of the other fixed network services; and it also wanted the ACCC to continue rolling back regulation of DTCS, saying "it is critical that the Commission continues along the deregulatory path recently taken in relation to Telstra's exemption applications for the service...[and] this regulatory rollback needs to happen in line with the emergence of competition, rather than in the delayed and piecemeal fashion that has occurred to date."

Telstra also wanted the ACCC to consider adopting a process for the regulation of the DTCS that "maximises the potential for regulation to be reviewed on a regular basis, rather than relying upon members of the industry to initiate lengthy and costly exemption processes to prompt regulatory rollback."