ACCC issues discussion paper on future local services regulation

The Australian Competition and Consumer Commission today issued a discussion paper on the future of local services regulation. The discussion paper marks the start of a full review of local call regulation in Australia.

Primarily the review is a reconsideration of the Local Carriage Service (LCS) declaration and pricing. The LCS is a declared wholesale service for end-to-end local calls. It allows competitive entrants to provide local calls without deploying substantial alternative infrastructure.

"The ACCC is obliged to review the declaration before June 2006", an ACCC Commissioner, Mr Ed Willett, said today. "However, ongoing concerns about the competitive impact of local call pricing have led us to bring the review forward by several months. Specifically, there are continuing concerns about the impact of aggressive bundling of other voice service and broadband on the local call market and the increasing inability of other service providers to compete when selling local calls.

"Equally, there are questions about whether the local call declaration is still needed to act as a catalyst for facilities-based competition or whether there are now feasible alternatives for fulfilling that objective".

In considering these issues, the inquiry will also look at the desirability of declaring a wholesale line rental service.

"Effectively the review is a complete reappraisal of local call and local service regulation against the background of significant changes to the form and nature of telecommunications services being supplied to end users.

"The review is designed to ensure that any regulation of local services provides the necessary incentives for growth in facilities-based competition while at the same time continuing to ensure that all Australians benefit from a choice of local call providers", he said.

The discussion paper will be available on the ACCC website. Interested parties are requested to make submissions by 3 June 2005. Details of the submission process can be found in the discussion paper.