ACCC seeks comments on plans for non-price terms for regulated services

25 Mar 2015

The Australian Competition and Consumer Commission (ACCC) has published its draft decision on non-price terms for regulated services, with this including proposed connection charges for fixed line services.

As per the regulator’s draft ruling, it has put forward a targeted set of non-price terms which ‘focus only upon those aspects of access where commercial agreements are less likely to ensue and where specific competition concerns are likely to arise’. These non-price terms, it has noted, cover commercial and operational matters, such as billing and notification, general dispute resolution processes, and some ordering and provisioning processes for certain regulated services. With the draft decision continuing to set regulated charges for the connection of fixed line services, the ACCC said that connection charges were an unavoidable cost of providing voice and broadband services to end-users using Telstra’s copper network. It has, however, said that most of the draft connection charges are lower than current rates, reflecting efficiencies achieved by the fixed line incumbent in the way that it manages external contractors undertaking connections work.

Meanwhile, the ACCC said it had not received evidence of widespread competition concerns that were significant enough to warrant a more comprehensive approach to setting regulated non-price terms of access. However, on the back of a review of access agreements the watchdog said it was concerned that some commercially negotiated agreements may include clauses that could exclude the application of future regulated terms during the life of such contracts. On this matter, ACCC commissioner Cristina Cifuentes noted: ‘We are currently working constructively with an access provider to provide for terms that will give an opportunity to access seekers to seek regulated terms either at the end of a two year contract period or with six months’ notice, along with specific commitments to negotiate in good faith in relation to regulated terms.’ The ACCC has said it will continue to monitor industry developments to see if regulated terms are being made available to access seekers, adding that it may consider further action if concerns remain.

A consultation on the proposals has now been launched, with the inquiries seeking to determine regulated prices and non-price terms that will apply when access providers and access seekers cannot reach agreement through commercial negotiations. As such, the ACCC is seeking submissions on its draft decision on non-price terms for the regulated services and connection charges for fixed line services by 17 April 2015. Subsequently, the ACCC intends to publish final decisions on non-price terms for the regulated services and on connection charges (as part of the fixed line services final access determination on primary prices) in late June 2015.