ACCC issues discussion paper on access undertakings lodged by Hutchison for mobile terminating access service

The Australian Competition and Consumer Commission today issued a discussion paper on the ordinary access undertakings lodged by Hutchison Telecommunications (Australia) Limited and Hutchison 3G Australia Pty Ltd in relation to the mobile terminating access service.

"On 7 October 2005, Hutchison lodged six ordinary access undertakings with the ACCC relating to the MTAS", an ACCC Commissioner, Mr Ed Willett, said today. "Three of the undertakings have been submitted on behalf of HTAL and the remaining three on behalf of H3GA. Hutchison provided a submission in support of the undertakings on 13 October 2005.

"Hutchison's undertakings specify some of the price and non-price terms and conditions on which it proposes to supply the MTAS".

Under the Trade Practices Act 1974, the ACCC must accept or reject the undertakings based on whether it considers their terms and conditions to be reasonable.

The lodgement of the undertakings follows the ACCC's decision on 30 June 2004 to continue regulating MTAS. On this date, the ACCC decided to introduce a new approach to regulating the price of this service that would ensure a closer correlation between its price and cost. In its decision, the ACCC estimated that the cost of providing this service, including a normal profit, lay within a range of 5 to12 cents per minute.

Copies of the undertakings, the submission and the discussion paper will be available from the ACCC's website. The ACCC invites submissions on any aspect of the undertakings.

Background

Hutchison Telecommunications (Australia) Limited (HTAL) and Hutchison 3G Australia Pty Ltd (H3GA) (together Hutchison), have lodged access undertakings with the Australian Competition and Consumer Commission.

Under s152BS of the Trade Practices Act 1974, a carrier or carriage service provider may provide the ACCC with a written access undertaking under which the carrier or carriage service provider undertakes to comply with the terms and conditions specified in the undertaking in relation to the standard access obligations applicable.

The MTAS was deemed to be declared under the Telecommunications (Transitional Provisions and Consequential Amendments) Act 1997.

In July 2001, following a series of arbitrations, the ACCC developed a retail benchmarking pricing principle to guide mobile operators in establishing the price of the MTAS.

On 30 June 2004, the ACCC allowed the existing declaration of the MTAS to expire, and replaced it with a new declaration under s152AL of the Act. The new declaration included termination of voice calls on 2.5G and 3G mobile networks. On the same date, the ACCC issued a new pricing principle providing that the price of the MTAS should follow an adjustment path such that there is a closer association of the price and the underlying cost of the service.

Subsequent to the ACCC's decision to continue regulating the MTAS, Optus lodged an ordinary access undertaking on 24 December 2004, which specified some of the price and non-price terms and conditions on which it proposes to supply MTAS on its GSM mobiles network. Likewise, Vodafone lodged an undertaking on 23 March 2005. Vodafone's undertaking specifies some of the price and non-price terms and conditions on which it proposes to supply the service on its 2G and 2.5G networks.

The ACCC issued a draft decision to reject the Optus Undertaking on 8 November 2005. The ACCC intends to complete its assessment of the Optus Undertaking in December 2005. The ACCC expects to make a draft decision in relation to the Vodafone's Undertaking in late November/early December 2005.

Since December 2004, eleven MTAS access disputes have been notified to the Commission under Part XIC of the Trade Practices Act 1974 (the Act). Two of the access disputes have since been withdrawn.

In July and August 2005, the ACCC made interim determinations in a number of MTAS access disputes. A number of such interim determinations, and redacted versions of the accompanying statements of reasons are available on the Commission's website.

Given that the legislation contemplates that arbitrations be conducted in private, the ACCC will not be making any further public comment about the specific MTAS access disputes before it at this stage.