Alternative Australian operators call for continued copper regulation

4 Sep 2013

Despite NBN Co having confirmed in July 2013 it had hit revised end-of-year targets for the number of homes passed by the National Broadband Network (NBN), the country’s alternative operators have argued that the slow network rollout means that regulation of Telstra’s copper network should remain in place.

According to ZDNet Australia, in a submission to a review of the country’s fixed line services being carried out by the Australian Competition and Consumer Commission (ACCC) iiNet said that regulation of the incumbent’s copper infrastructure should continue, with its submission to the review cited as stating: ‘Quite simply, the NBN rollout has been too slow, and its current and foreseeable geographic reach is too limited to act as a substitute for Telstra’s copper that can warrant removal of regulation over the next regulatory period.’ Further, the operator claimed that should Telstra’s obligations in the fixed line arena be removed it would be able to increase the cost of wholesale access, which in turn might prompt operators to raise prices for consumers. Such a situation, it said, would effectively provide Telstra with the opportunity to seize a greater market share before the NBN rollout has been completed. Meanwhile, Telstra’s largest rival in the fixed line arena in terms of subscribers, Optus, is said to have echoed such comments, while Macquarie Telecom was also cited as saying that the NBN had thus far had ‘negligible impact’ on the reliance on the incumbent’s copper network.

As previously reported by CommsUpdate, in July 2013 the ACCC launched declaration inquiries for the Domestic Transmission Capacity Service (DTCS), as well as six other fixed line services, those being: unconditioned local loop services (ULLS), line sharing services (LSS), public switched telephone network originating and termination access (PSTN OA and PSTN TA), local carriage services (LCS) and wholesale line rental (WLR). With specific regards to DTCS, often referred to as backhaul, in launching the review the regulator noted that the existing declaration covered most transmission routes in Australia, other than where it had found effective competition between transmission providers. As such, the ACCC said it would look to determine whether backhaul services should continue to be regulated, noting that if necessary a separate inquiry would be launched in early 2014 into the prices and other terms and conditions that should apply to the service. A number of issues relevant to the contemporary transmission market are being considered, with these including: the appropriate scope of DTCS regulation, including whether routes that are currently regulated should continue to be regulated or not and whether routes that are not regulated require regulation; the adequacy of the existing DTCS service description; and the impact of the NBN, if any, on the DTCS market. Meanwhile, with regards to the other fixed line services, the ACCC said it was seeking comments on issues including: whether continued declaration of the fixed line services would be in the long term interests of end users; whether the existing service descriptions for these services are appropriate; whether recent developments in the industry indicate that new or different resale services should be declared; and whether the ACCC should regulate resale services over the NBN.