Communications regulatory environment can provide 'certainty': ACCC

The current regulatory environment for communications can provide 'certainty' for communications companies, ACCC Chairman, Mr Graeme Samuel, said today*.

The ACCC was seeking practical and timely outcomes in the sector while under pressure to deliver 'certainty' to an industry which is in a state of flux.

Certainty meant different things to different firms, he said.  For example, Telstra wanted regulatory certainty before it would put forward a detailed proposal on the proposed fibre to the node network.

Certainty in this case probably meant certainty about both the services or prices that would apply in respect of a new network, and also Telstra's obligations to the wholesale services that it already supplies.

"In that respect, and there are mechanisms in the Trade Practices Act for dealing with each.  Certainty regarding the provision of services over Telstra's existing network can be addressed through access undertakings.  Meanwhile, it is no secret that the ACCC and Telstra have been discussing how Telstra can seek certainty under the Act as to its obligations in relation to new services.

"At the same time, the ACCC is aware that a number of carriers have well-advanced plans to take-up large numbers of ULLS to deploy DSL infrastructure.  These competitors currently find themselves in a state of uncertainty and doubt about the viability of their existing ULL-based businesses.

"In addition, the extent that it is technically workable for copper to exist alongside FTTN is unclear – so these competitors face a risk that their existing DSLAMs could become stranded. Compounding all of these concerns is the ambiguity as to whether FTTN will even proceed.

"The ACCC is acutely aware that these concerns need to be resolved promptly if the competitive momentum that has emerged in the past couple of years is to continue".

Mr Samuel said that access undertakings had the potential to achieve desired outcomes by setting out terms and conditions that could be workable for all users, but the ACCC's recent experience had shown the processes did not seem to run as smoothly as initially envisaged.

"We have seen a range of parties submit undertakings that don't have reasonable prospects of being accepted, and consequently delay the arbitration of an access dispute". 

Mr Samuel said the position of the ACCC and the Government had been communicated clearly, that the existing legal processes in the Act could be used to ensure investment and regulatory certainty for carriers seeking to roll out fibre in the future and that no changes to the legal regime should be necessary for Telstra or anyone else to implement the proposal.

"As the months pass by since FTTN was first flagged as a genuine possibility, investors and competitors are no less in the dark about what they might expect.

"Earlier I referred to the uncertainty and doubt experienced by Telstra's ULL-based competitors who have increased the competitive tension with Telstra through their DSLAM investments.  I was interested to note recent commentary suggesting regulatory uncertainty is actually good news for Telstra because it slows down competitive investment.

"I would anticipate that if Telstra or the [alternative] G9 [proposal] does put forward a detailed proposal for public scrutiny, some of the doubt and uncertainty in the market may be alleviated; or at the very least, parties will be able to form their opinions.

"For now, the G9's high level proposal might actually help to crystallise some questions about future competitive models, including whether we can have both FTTN and competition in Australia – goals which need not be mutually exclusive".

Background

*Mr Samuel was addressing the Australian Telecommunications Summit 2006 in Sydney.