Telstra sides with the ACCC after Competition Tribunal knocks back ACCC ruling

Stuart Corner
Wednesday, 14 January 2009 13:53

IT Policy - Government Tech Policy

In August the ACCC granted Telstra's application for 248 of the 388 exchange areas, subject to some exemptions, despite strident opposition from Telstra's competitors. The ACCC said it believed the decision would be in the long term interests of end users by promoting a greater level of facilities-based competition using the unconditioned local loop service.

The 248 ESAs nominated were those where four or more Unconditioned Local Loop Service (ULLS)-based competitors had entered the market or where there were more than 14,000 or more addressable services in operation.

The ACCC acknowledged that in exchanges that had not yet attracted many ULLS-based competitors, removal of regulated access to LCS and WLR might result in resale competitors exiting the supply of fixed voice or in a diminution in competition in the downstream market but said that it "considers that its proposed delineation of [exchange service areas] adequately balances these risks against the long-term competitive benefits."

The decision was due to come into effect in 12 months. However one of Telstra's competitors (iiNet subsidiary, Chime Communications) appealed the ruling to the Australian Competition Tribunal which overturned the ACCC's decision saying: "It would normally be easier to revisit a decision at a later stage and subsequently withdraw regulation, than it would be to re-regulate after the market had been divested of some or all of its regulatory constraints."

Commenting on the ruling, ACCC chairman, Graeme Samuel, said: "The ACCC recognises that this decision was a matter of judgement and understands that there are reasons why the Tribunal came to a different conclusion. As with all court and Tribunal decisions, the ACCC will review those reasons and consider the implications for the ongoing performance of its regulatory functions."