ACCC proposes reporting and monitoring requirements for provision of telecommunications services in the corporate market

The Australian Competition and Consumer Commission has issued a discussion paper looking at how it could better assess the level of competition in the corporate customer segment of the Australian telecommunications market.

The discussion paper follows the tabling of ACCC's report on the competition in the corporate customer segment for the July – December 2003 period, by the Minister for Communications, Information Technology and the Arts.

While the tabled report outlines how the ACCC delineated the corporate customer segment, the discussion paper proposes the possible establishment of a number of information gathering and monitoring measures relating to the provision of products and services to that market.  This is to assist the ACCC with its reporting role on the corporate customer segment.  The discussion paper has been issued for public comment.

The discussion paper and the tabled report are a part of the revised accounting separation framework for Telstra, aimed particularly at fostering a more transparent and better informed corporate customer segment of the telecommunications market.  This is intended to improve the information available to Telstra’s competitors and provide the ACCC with a tool to systematically monitor and investigate allegations of anti-competitive conduct.

ACCC Chairman, Mr Graeme Samuel, said the proposed measures would nonetheless need to be assessed carefully to ensure that any additional reporting obligations are clearly justified in a cost-benefit sense, in terms of their ability to provide the ACCC with a much clearer picture of the corporate segment of the market and allow it to act quickly on any complaints of anti-competitive behaviour. 

"The ACCC is particularly looking for industry comment on the effectiveness and adequacy of these measures", he said.

The measures will also need to be assessed having regard to the current operation of other monitoring and reporting requirements which have previously been imposed.

A copy of the ACCC discussion paper, Competition in the corporation customer segment of telecommunications markets: Further issues, can be found on the ACCC website (see below).

The ACCC has called for submissions from industry participants and other interested parties by no later than 31 January 2005.

Background

On 19 June 2003, the Minister for Communications, Information Technology and the Arts issued the ACCC with the Australian Competition and Consumer Commission (Accounting Separation – Telstra Corporation Limited) Direction (No.1) 2003 (the Direction) under subsections 151BUAA(1), 151BUAA(1B) and 151CMA(1) of the Trade Practices Act 1974.

The direction, which principally outlines new accounting separation requirements for Telstra, includes a requirement for the ACCC to monitor and prepare six-monthly reports to the Minister on competition in provision of services to the corporate customer segment of the telecommunications market.

The ACCC is required to submit a report to the Minister as soon as practicable after the end of each six-month period with the first period beginning on 1 July 2003 and ending on 31 December 2003.

Sub-clause 9 (2) of the direction outlines the matters that the ACCC may provide an analysis of, or comment upon in preparing its reports:

• emerging or long-term trends in the corporate segment of the business customer group;
• relevant regulatory activity undertaken by the ACCC;
• indicators of emerging systemic discrimination between Telstra's supply of wholesale services and retail services in relation to price-related terms and conditions and non-price terms and conditions;
• the level of telecommunications charges and market shares in the corporate segment of the business customer group; and
• any other matter the ACCC considers relevant.

The ACCC released its discussion paper Competition in the corporate customer segment of the telecommunications market in November 2003.  That paper sought the views of interested parties on how the ACCC should implement its reporting requirements under the Direction.

Following this, the ACCC submitted the first of the six-monthly reports on competition in the corporate segment of telecommunications markets, covering the July-December 2003 period, to the Minister on 2 July 2004.  The first report has been tabled in the House or Representatives on 2 December 2004.

The current discussion paper is aimed at aiding the ACCC in preparing the second six-monthly report, covering January-June 2004 period.