On 31 May the ACCC issued two annual reports on issues relating to competition in the telecommunications industry in 2003–04.
The ACCC is required to provide two annual telecommunications reports to the Minister for Communications, Information Technology and the Arts, under Division 11 and 12 of Part XIB of the Trade Practices Act 1974:
the competitive safeguards report under sub-section 151CL(1) of the Act
the changes in the prices paid by consumers for telecommunications services report under paragraph 151CM(1)(a) of the Act.
The competitive safeguards report comprises an overview of ACCC regulatory activities during 2003–04, including its responsibilities in relation to Parts XIB and XIC of the Act and under the Telecommunications Act 1997. It also includes an examination of the state of competition across various telecommunications markets. The markets examined in detail include:
fixed line
mobile services
internet and data services.
The change in prices report details how average prices paid for various telecommunications services have moved in real terms from one financial year to the next. The comparison dates back to 1997–98 for most indexes, although some have a more recent base year.
The report measures average changes in real prices paid by consumers for telecommunications services. In this regard, real price movements for services may not necessarily follow the trend observed in nominal (or actual) price movements. In particular, by taking out the effect of inflation, real price movements are likely to overestimate price decreases and underestimate price increases.
The telecommunications services covered in the 2003–04 report include PSTN services, which are fixed-line services, and mobile telephony services provided by GSM (global system for mobiles) and CDMA (code division multiple access) networks.
For PSTN services, the average prices reported are split into three consumer groups (residential, small business and other business consumers) and five services (basic access, local call, national long distance, international and fixed-to-mobile services).
The competitive safeguards report found that competition in the telecommunications sector provided positive outcomes over the past seven years, but that the positive effects slowed in 2003–04, continuing a trend observed for 2002–03.
The report on prices paid for telecommunications services shows that, overall, average prices paid by telecommunications consumers decreased by 1.1 per cent during 2003–04. This overall decline reflects the combination of a marginal increase of 0.2 per cent in prices paid for PSTN services and a decrease of 3.2 per cent in prices paid for mobile services. Further, the marginal increase in prices paid for PSTN services was not reflected evenly across the residential, small business and large business markets. The average prices paid by residential and small business customers rose by 1.4 per cent and 3.1 per cent respectively, while the average price paid by large business consumers fell by 5.6 per cent.
With respect to changes in prices paid for mobile telephony services, the report indicates that the overall decrease in prices paid was primarily due to lower prices paid by consumers for pre-paid services. In this respect, the prices paid for pre-paid services on GSM and CDMA networks fell by 5.6 per cent and 4.3 per cent respectively, while the prices paid for post-paid services fell by just 1 per cent for GSM services and 1.5 per cent for CDMA services.
Both reports are published in full on the ACCC website at: Annual telecommunications reports
ACCC approves extension of time for the lodgment of access arrangement for the proposed Central Ranges pipeline
On 25 May 2005 the ACCC granted a request by Central Ranges Pipeline Pty Ltd that the lodgment date for the proposed access arrangement be extended from 30 May 2005 to 5 August 2005. The ACCC has previously granted three requests for extensions of time for the lodgment of the access arrangement. Section 7.19 of the National Third Party Access Code for Natural Gas Pipeline Systems (the code) does not limit the length or number of time that extensions can be granted to parties.
The pipeline became a covered pipeline under the code following approval by the ACCC in May 2004 of a competitive tender process conducted by the Central Ranges Natural Gas & Telecommunications Association Inc. Construction of the pipeline is expected to commence in August 2005.
The ACCC is continuing with its assessment of Directlink's application for conversion from a market network service to a prescribed service and a maximum allowable revenue for 2005–15.
PB associates and IES were engaged by the ACCC to assist in the review of Directlink’s application. Their reports are available from the ACCC website. Comments from interested parties on the IES report were recently received by the ACCC and are also available on the website.
On 4 March 2005 the ACCC received applications for authorisation of amendments to the code (Nos A90958–60). The proposed amendments are intended to standardise B2B governance arrangements for communications between distribution and retail companies operating in the National Electricity Market. The applications were submitted by NECA on behalf of NEMMCO and NECA subsequently requested an interim authorisation for the code changes.
On 13 April 2005 the ACCC granted interim authorisation to the applications.
The ACCC issued its draft determination on 11 May 2005 proposing to grant authorisation without condition. Following one submission on the draft determination, the ACCC expects to release a final determination in June 2005.
On 18 March 2005 the ACCC received applications for authorisation (Nos A40100–2) of amendments to the code. The applications were submitted by NECA on behalf of the Australian Capital Territory Chief Minister’s Department.
The applications for authorisation seek amendments to the ACT’s derogations from chapter 7 of the code. The purpose of the proposed amendments is to provide that distribution businesses will continue to have exclusive responsibility for providing metering services to all small customers using types 5–7 metering installations until 31 December 2006.
The ACCC released a draft determination on 12 May 2005 which contained the ACCC’s decision to grant interim authorisation to the derogations, with effect from that day.
The ACCC expects to release a final determination in June 2005.
On 18 March 2005 the ACCC received applications for authorisation (Nos A40103–5) of amendments to the code. These applications were lodged by NECA on behalf of the South Australian Government.
The applications seek to amend clause 9.30.1 of South Australia's current metering derogations from chapter 7 of the code. The South Australian derogations make distributors exclusively responsible for metering installation types 5 (interval meters) and 6 (accumulation meters) for small customers and 7 (unmetered supply) for a transitional period until 1 July 2005. The derogations also specify arrangements for payment of distributors' metering costs during this transitional period.
The applications seek to extend the duration of the derogations to 31 December 2006. The applications also seek to amend clause 9.30.1 to align it with the ACCC's recent final determinations in relation to similar New South Wales and Victorian metering derogations. That is, the proposed derogation amendments will ensure that retailers may elect to be responsible for the provision, installation and maintenance of remotely read type 5 meters.
The ACCC released a draft determination on 12 May 2005 which contained the ACCC’s decision to grant interim authorisation to the derogations, with effect from that day.
The ACCC expects to release a final determination in June 2005.
On 26 April 2005 the ACCC received applications for authorisation (Nos A90969–71) of amendments to the code. The applications were submitted by NECA on behalf of the New South Wales Government.
The purpose of the applications for authorisation is to seek amendments to the National Electricity Code to implement revenue cap re-opening provisions specific to TNSPs in the New South Wales jurisdiction.
The ACCC expects to release a draft determination in July 2005.
