Telstra’s regulation exemption in some exchanges being re-examined

1 Jul 2011

The Australian Competition and Consumer Commission (ACCC) is reportedly reconsidering a ruling it previously made under which fixed line incumbent Telstra was initially exempted from regulation in 248 exchanges, amid claims that some of the exchanges in question were not meeting exemption requirements. Having previously ruled that exemption would be allowed in those exchange areas where three or more local loop unbundled-based (LLU-based) providers were offering services to 14,000 or more customers, the regulator has now noted: ‘The ACCC is concerned that competitive pressures on Telstra in the exempt exchanges may not be living up to expectations at the time of the original exemption decision. The ACCC is also concerned that wholesale service offers in the exempt exchanges may be on substantially less-favourable terms than those available in regulated exchanges.’ Rival operators meanwhile have been quick to suggest that the exemptions could be reversed, with Herbert Geer, acting on behalf of iiNet, Internode, Adam Internet and Aussie Broadband, claiming that incorporating the new access determinations would ‘lead to Telstra becoming unconstrained in the markets for wholesale and retail voice services’, with Macquarie Telecom arguing that the exemption determinations no longer affected the market. Telstra for its part has said that the ACCC should retain the exemptions in those exchanges where sufficient competition exists, noting: ‘Telstra considers that access seeker submissions against the exemptions are without merit, and will lodge a further submission with ACCC, which rebuts access seeker submissions and reinforces the appropriateness of the exemptions.’

Currently Telstra is exempted from offering PSTN Originating and Terminating Access (OTA), Local Carriage Service (LCS) and Wholesale Line Rental (WLR) at 215 exchanges, while any new decision on exemptions will be made to take effect from 30 December 2011.