The Australian Competition and Consumer Commission is vested with powers to arbitrate telecommunications access disputes and make a final binding determination to resolve a dispute. Arbitration hearings are private and the ACCC generally does not make any public comment on disputes except to announce when a dispute has been notified.
Details of determinations can be viewed on the public register.
Division 5 of Part XIC of the Trade Practices Act 1974 enables access providers to voluntarily lodge written access undertakings with the ACCC specifying the terms and conditions upon which they agree to supply a specified service. The ACCC can accept or reject the undertaking.
Part XIC of the Trade Practices Act enables the ACCC to ‘declare’ telecommunications services. Upon declaration, standard access obligations apply. The access provider is obliged to supply the service to an access seeker upon request.
The ACCC has the ability to vary or revoke declarations, but with the exception of minor changes, must hold a public inquiry ahead of such changes.
The ACCC published an interim determination, together with the statement of reasons, in two telecommunications access disputes regarding the supply of the Mobile Terminating Access Service (MTAS) by Optus Mobile Pty Limited and Optus Networks Pty Ltd (together, the Optus Entities) to Telstra Corporation Ltd.
The interim determinations, made on 18 December 2006, set out the charges to be paid by Telstra to the Optus Entities for the supply of MTAS, except where agreed otherwise by the parties.
The interim determinations set a price for the MTAS of 12 cents per minute for the period from 1 January to 30 June 2007. Further information is available on the ACCC website.
Local call resale services and wholesale line rental
On the 22 January the ACCC made interim determinations in two telecommunications access disputes regarding the supply of local call resale services and wholesale line rental from Telstra Corporation Ltd to Optus Networks Pty Ltd. The ACCC published the interim determinations and accompanying statements of reasons to encourage reasonable local call resale and wholesale line rental prices to apply across the market.
In making the interim determinations, the ACCC maintained consistency with pricing principles and indicative prices for local call resale and wholesale line rental, to provide that the charges payable by Optus to Telstra for the period up to 31 December 2007 are:
local call resale: 17.92c per call
wholesale line rental: indicative prices of $23.12 for HomeLine Part and $25.84 for BusinessLine part.
The ACCC is now moving towards a final determination in this matter, taking into account broader and more complex issues.
Further information is available on the ACCC website.
Confirmation of interim determinations
The ACCC published further details of interim determinations made in two telecommunications disputes regarding the supply of line sharing services (LSS)—one between Telstra Corporation Ltd and Chime Communications Pty Ltd and the other between Telstra Corporation Ltd and Request Broadband Pty Ltd.
The publication relates to the terms to apply on an interim basis to the connection and disconnection of the LSS (either on an ad hoc basis or as part of a managed network migration), and the basis upon which those terms have been specified. For instance, for a managed network migration, the interim determinations provide for a connection charge of $1500 per migration for up to 50 connections at an exchange, and an additional $30 per connection beyond 50. The interim determinations also specify that the access seeker is not required to pay a disconnection charge where a new service is to be provided on the line within 30 days, such as where the end-user churns to another service provider or the access seeker is migrating services from the LSS to the unconditioned local loop service (ULLS).
The ACCC has previously published details of the LSS annual charges to apply on an interim basis in these access disputes. The LSS connection and disconnection terms are in addition to the previously published LSS annual charge terms.
The ACCC intends to move the Chime and Request disputes towards a final determination as a matter of priority.
Further information is available on the ACCC website.
Notification of access disputes
Two telecommunications access disputes have been notified to the ACCC under Part XIC of the Trade Practices Act.
Adam Internet Pty Ltd notified the ACCC of an access dispute with Telstra Corporation Ltd relating to the charges associated with the supply of the ULLS from Telstra.
Primus Telecommunications Pty Ltd notified the ACCC of an access dispute with Telstra Corporation Ltd relating to the charges associated with the supply of the LSS from Telstra.
The ACCC has commenced the arbitration process for both these access disputes. Further information is available on the ACCC website.
The ACCC seeks submissions on the future costing model for MTAS
In June 2006 the ACCC engaged international consultants WIK-Consult to develop a bottom-up cost model that estimates the efficient cost of supply of MTAS in Australia using a total service long-run incremental cost conceptual framework.
The current MTAS pricing principles determination expires on 30 June 2007, and the ACCC will use the WIK cost model to inform the MTAS pricing principles from 1 July 2007. As part of this process the ACCC is seeking submissions on the WIK cost model from interested parties.
The report, Mobile Termination Cost Model for Australia, a discussion paper and a reference document are available on the ACCC website. The WIK mobile network and cost model and the user manual will be made available to interested parties who agree to the terms and conditions specified in the WIK mobile network and cost model access deed, which is available as an appendix to the discussion paper.
The ACCC is seeking submissions from interested stakeholders on issues as set out in the discussion paper by no later than 5 pm on Friday, 16 March 2007.
ACCC seeks tenders for the development of a fixed network services cost model
The ACCC has called for tenders for the development of a fixed network services cost model to inform its regulatory decisions in the future. Tenders are asked to bid on the development of an engineering economics model that estimates the efficient, forward-looking costs of supplying services on Australia’s fixed telecommunications network. The successful model would assist the ACCC in its decision-making on all regulated fixed services, such as the ULLS, PSTN OTA services, LSS and LCS.
In 2006 the ACCC engaged WIK–Consult to develop a mobile network and cost model for the supply of the mobile terminating access services. The ACCC had indicated that the development of the fixed network services cost model is the next step in the ACCC’s cost model development process.
The closing date and time for tenders is 2 pm (AEST) on 23 March 2007.
Further information is available on the ACCC website.
ACCC releases September 2006 Snapshot of broadband deployment
The ACCC has released its Snapshotofbroadband deployment for the September 2006 quarter. The report details the deployment of broadband services throughout Australia as at 30 September 2006 and is based on data provided by major carriers of broadband services.
The main findings of the report included:
As at 30 September 2006 total broadband take up was 3 639 700.
Broadband take-up has increased by 1 232 300, or 51 per cent, from the September 2005 figure of 2 407 400.
The take-up of ADSL services is now at 2 763 000.
Total quarterly growth in broadband was at 9.3 per cent for the September 2006 quarter.
While growth is lower than previous quarters, this is to be expected given the larger base of total connections in absolute terms.
In preparing the broadband snapshot report for the September quarter, the ACCC adjusted the historical data to ensure that double counting did not occur.
Powerlink Queensland transmission network revenue cap
The Australian Energy Regulatory (AER) made its draft decision on the revenue cap to apply to Powerlink from 1 July 2007 to 30 June 2012 on 8 December 2006.
On 15 December 2006 the AER received a supplementary revenue cap proposal from Powerlink. The proposal seeks higher levels of capital expenditure resulting from new information (for example, revised demand forecasts and higher input costs).
The AER received 13 submissions from interested parties commenting on its draft decision and Powerlink’s supplementary revenue cap proposal. As part of making its final decision, the AER will take the issues raised in these submissions into consideration. The AER anticipates releasing its final decision in May 2007.
Documents associated with the revenue reset—including AER’s draft decision, Powerlink’s application and supplementary revenue cap proposal, submissions from interested parties and consultants' reports—can be found on the AER website.
Re-opening TransGrid’s revenue cap for material error—final decision
On 2 February 2007 the AER decided to revoke and substitute TransGrid's 2004–05 to 2008–09 revenue cap under clauses 6.2.4(d)(2) and 6.2.4(e) of the National Electricity Rules (NER). TransGrid requested this re-opening in November 2006 on the grounds that there was a material error in setting its revenue cap in 2005. The AER's reasons for this decision and the amendments to TransGrid's revenue cap can be found on the AER website.
Transitional pricing methodology arrangements for SP AusNet, VENCorp and ElectraNet
The NER requires the AER to prepare a pricing guideline for transmission network service providers by 31 October 2007. The NER also requires the AER to develop transitional pricing arrangements in consultation with SP AusNet, VENCorp and ElectraNet to give effect to the process by which the AER will assess the TNSPs' pricing methodology.
On 16 February 2007 the AER issued the agreed interim requirements that will apply to the SP AusNet, VENCorp and ElectraNet 2007 reset processes in 2007; an explanatory statement was also issued. Documents associated with the interim arrangements are available on the AER website.
Roma to Brisbane Pipeline revised access arrangement
On 20 December 2006 the ACCC released its final decision on APT Petroleum Pipelines Ltd’s revised access arrangement for the Roma to Brisbane Pipeline (RBP), determining not to approve it in its current form and specifying nine amendments.
APT Petroleum Pipelines Ltd (APTPPL) submitted an amended revised access arrangement and access arrangement information to the ACCC on 28 February 2007. The ACCC expects to make a further final decision by the end of March 2007.
Documents associated with the access arrangement, including the ACCC’s final decision, APTPPL’s amended revised proposal and access arrangement information, submissions from interested parties and consultants' reports are available on the AER website.
Dawson Valley Pipeline proposed access arrangement
On 5 February 2007 the ACCC received a proposed access arrangement and access arrangement information from Anglo Coal (Dawson) Limited, Anglo Coal (Dawson Management) Pty Ltd and Mitsui Moura Investment Pty Ltd, the service providers of the Dawson Valley Pipeline (DVP).
The DVP transports gas 47 km from coal seam methane gasfields in the Dawson Valley, Queensland to the Wallumbilla to Gladstone via Rockhampton pipeline (the Queensland Gas Pipeline).
Submissions in response to the proposal close on Friday, 16 March 2007. The ACCC anticipates the release of its draft decision in May 2007.
Documents associated with the access arrangement, including the proposal and access arrangement information, are available on the AER website.
Applications to waive ring-fencing obligations for the Dawson Valley Pipeline
On 14 November 2006 the ACCC received applications to waive certain ring-fencing obligations from Anglo Coal (Dawson) Limited, Anglo Coal (Dawson Management) Pty Ltd and Mitsui Moura Investment Pty Ltd, the service providers of the DVP.
All three service providers sought waivers of obligations under s. 4.1(b) of the Gas Code with respect to carrying on a related business. Anglo Coal Ltd and Anglo Coal Pty Ltd also sought waivers of the obligations under ss. 4.1(h) and (i) with respect to marketing staff.
On 20 December 2006 the ACCC released its draft decision granting the waivers for marketing staff but not the related business waivers. Following consideration of submissions received in response to the draft decision, the ACCC released its final decision on 14 February 2007 to grant each of the waivers.
The ACCC’s final decision and other documents relating to this matter are available on the AER website.
NT Gas associate contract
On 25 January 2007 NT Gas Pty Limited (NT Gas) requested the ACCC approve a contract with NT Gas Distribution (NTGD—an associated company) for the interruptible supply of gas. Under s. 7.1 of the Gas Code the ACCC must approve an associate contract unless it considers the contract would have the effect, or would be likely to have the effect, of substantially lessening, preventing or hindering competition in a market. The contract will expire on 1 January 2009. The ACCC is currently assessing the proposal, including undertaking public consultation, and anticipates making a decision in March 2007.
On 9 February 2007 NT Gas requested the ACCC approve a contract with NTGD that effectively extends their current associate contract up to 15 June 2007 or to when the ACCC makes a decision (whichever comes first). The ACCC approved this contract on 28 February 2007.
On 21 February 2007 the AER made a submission to the Ministerial Council on Energy’s Retail Policy Working Group's third working paper, which was developed by Allens Arthur Robinson (AAR). The RPWG is charged with developing the 2007 legislative package to complete the transfer of the national distribution and retail regulation functions to the Australian Energy Market Commission and the AER.
The third working paper covers business authorisation arrangements, ring-fencing and retailer failure arrangements. In its submission the AER made commented on the proposals in the working paper, including its broad support for:
the creation of a single national business authorisation regime
robust ring-fencing arrangements with the elevation of high-level ring-fencing principles, where appropriate, to the National Electricity Law (NEL)
a timeline, as a matter of high priority, to facilitate making policy decisions and workable legislation in respect of retailer failure arrangements.
The AER submission, along with its submissions on the first two working papers, can be found at www.mce.gov.au along with the RPWG’s current and previous working papers. It is anticipated that AAR's fourth working paper will be released in March, after which an official consolidated working paper will be issued for final public consultation.
Exposure Draft National Electricity Law Amendment Bill
On 22 February 2007 the AER made a submission to the Ministerial Council on Energy's consultation process on the Exposure Draft of the National Electricity Law Amendment Bill.
In its submission, the AER focused on four key points:
NEL access dispute arbitration arrangements should be aligned with the National Gas Law (NGL), and should enable the regulator to join other parties to an access dispute and to join two or more separate disputes together.
Transitional arrangements should be provided for each jurisdiction's initial distribution regulatory reset and a two-stage process should be used for electricity distribution regulatory resets.
The NGL ring-fencing provisions should be replicated in the NEL amendments, to provide consistent high-level ring-fencing arrangements across gas and electricity regulation. [AER, please check this point]
The benefits of regulatory performance reporting include informed policy-making, improved consultation processes and transparency.
Reports on the wholesale market price (or spot price) exceeding $5000MWh
The AER released two price reports on 14 February and 21 February 2007 detailing the events of 11 January and 16 January 2007, when the 30-minute spot price exceeded $5000/MWh.
A price report detailing the events of 23 and 24 January, when the 30-minute spot price exceeded $5000/MWh will be published shortly.
The AER continues to publish weekly market analyses that set out the spot price for each 30-minute trading interval in each region of the National Electricity Market. These reports and other related monitoring publications are available on the AER website.
On 22 February 2007 the ACCC issued its airports price monitoring and financial reporting report for 2005–06. This report provides information on prices, costs and profits relating to the supply of aeronautical and aeronautical-related services at Adelaide, Brisbane, Canberra, Darwin, Melbourne, Perth and Sydney airports.
The 2005–06 report shows that passenger numbers increased at all airports for the third consecutive year, most notably at Adelaide and Perth. This continues the trend of increases since 1997–98, interrupted only in 2001–02 by a fall in traffic.
The prices airlines paid to Australia’s major airports for aeronautical services such as runways and passenger processing facilities generally increased. Aeronautical revenue per passenger (used as a proxy for prices) increased at most airports, most notably at Adelaide, but decreased slightly at Canberra. Adelaide’s increase is primarily the result of the introduction of a passenger facilitation charge following the start of operations at its new Terminal 1.
Indicative aeronautical-related charges (for carparking, check-in counters and aircraft light and emergency maintenance sites and buildings) increased at all airports, most significantly at Canberra and Melbourne. Carparking revenue contributed between 67 per cent and 98 per cent of aeronautical-related revenue at airports.
Aeronautical costs increased at most airports in 2005–06, partly as a result of greater security requirements at airports since 11 September 2001. Aeronautical operating costs on a per passenger basis increased at all airports except Darwin. They increased significantly at Adelaide, where a new terminal became operational.
The report also shows that aeronautical airport operating margins generally increased in 2005–06. The aeronautical operating margin per passenger (the difference between the average revenue per passenger and the average operating expenses per passenger) increased at most airports (the exception was Canberra where margins decreased). Margins per passenger ranged from $1.44 at Brisbane to $6.41 at Darwin.
Aeronautical profitability, measured as a rate of return on assets, increased at most airports, while it decreased at Melbourne, Brisbane and Adelaide. However, in 2005–06 all airports continued to achieve positive earnings before interest, tax and amortisation expenses on average tangible non-current aeronautical assets.
The full report can be viewed on the ACCC website.
