ACCC re-regulates wholesale services in all previously exempt Telstra exchange areas

Stuart Corner
Friday, 16 December 2011 09:14

IT Policy - Regulation

The ACCC has revoked a ruling that exempted Telstra from being required to provide wholesale services at regulated prices from some 200 exchanges.

The services in question are the Wholesale Line Rental (WLR), Local Carriage Service (LCS), and PSTN Originating Access (PSTN OA) services. They are essential inputs for other service providers wanting to offer standard telephony services over the Telstra network.

Telstra and other carriers providing WLR and LCS services in the major CBD areas will continue to be able to set their own price and non-price terms and conditions as the CBD areas are excluded from the declarations for these two services.

The exemption had initially been granted - after much turmoil and controversy - on the grounds that there was sufficient infrastructure installed in the exchanges by Telstra's competitors and making use of the copper pairs connecting customers (and not connected into the Telstra network) to enable service providers to obtain these inputs from other network operators.

The decision will delight many of Telstra's competitors who had been arguing strenuously for it. It will greatly displease Telstra: it had been arguing for the exemption to be extended to many more exchange areas.

Announcing the decision, ACCC chairman, Rod Sims, said: "The ACCC believes that removing the exemptions will promote competition, the efficient use of and investment in infrastructure, and the long-term interests of end users. Telstra is currently exercising its market power to charge wholesale line rental prices that are significantly above supply costs in the exempt areas. There is a strong case for removing the exemptions."

The ACCC said that its analysis had found three key reasons for removing the exemption provisions. "First, uncertainty surrounding the timing and location of the rollout of the National Broadband Network, and subsequent decommissioning of the copper network, increases the risks associated with investing in copper-based infrastructure that will be redundant on the NBN.

CONTINUED