ACCC publishes report on fixed line service regulation

17 Apr 2014

The Australian Competition and Consumer Commission (ACCC) has published its final report into the regulation of fixed line telecommunications services, revealing that it will continue to regulate wholesale services supplied using fixed line incumbent Telstra’s copper network for another five years. As per the watchdog’s decision, all six fixed line services – unbundled local loop (ULL), Line Sharing Service (LSS), PSTN Originating and Terminating Access (PSTN OA and PSTN TA), Local Carriage Service (LCS) and Wholesale Line Rental (WLR) – will remain regulated until 2019.

Some adjustments to the scope of regulation have been made, however, with the ACCC saying such changes would ‘ensure that regulation is only applied where it is necessary to promote effective competition’. To that end, only resale voice services supplied in CBD areas where infrastructure-based competition has proven not to be sufficiently effective will be regulated, while it was noted that resale voice services provided using the National Broadband Network (NBN) will not be.

Meanwhile, having launched a public inquiry into making new final access determinations (FADs) for the regulated fixed line services and the wholesale ADSL service in July 2013, the ACCC said it does not expect this to be complete before the existing determinations expire on 30 June 2014. Citing the ‘number and complexity of the pricing issues’, the watchdog has therefore confirmed the extension of the existing FADs until such time as it can finalise revisions to the determinations. Saying it expects to complete the variation inquiry in June 2014, the ACCC is seeking views from industry players on it proposals to ensure the regulated resale prices will apply in central business district (CBD) areas and a regulated charge will continue to be available for the internal interconnection cable that is required to connect to Telstra’s network. With an ongoing consultation regarding arrangements for disclosing certain information on forecast expenditure and demand provided by Telstra for use in estimating prices in the FAD inquiry, once these are complete the ACCC aims to release a discussion paper in mid-2014, with a draft FAD to follow.

Commenting on the developments, ACCC chairman Rod Sims was cited as saying: ‘Regulating these services has promoted competition over bottleneck infrastructure. This has been fundamental to the development of competition in retail voice and broadband markets, which benefits Australian consumers … The ACCC’s decision to continue regulating the wholesale fixed line services will support continuing competition and efficient investment.’