The ACCC 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 made can be accessed on the public register.
Division 5 of Part XIC of the Trade Practices Act 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.
View the list of undertakings currently before the ACCC here.
Declared services
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 three final determinations made in the arbitration of separate disputes over access to the line sharing service (LSS). This service is provided by Telstra Corporation Ltd and access was being sought by Chime Communications, Priums Telecommunications and Request Broadband.
In each determination, the ACCC specified a LSS rental charge of $2.50 per service per month and has reduced the charges and timeframes to migrate in bulk wholesale ADSL services to the LSS.
No access undertakings were lodged with the ACCC this month.
Declared services
ACCC issues draft decision on future regulation of the LSS
The ACCC indicated that it intends to continue to regulate the LSS on a national basis until 31 July 2009. The regulation of the service will be reconsidered as part of the proposed comprehensive review of fixed line services regulation, which will commence in 2008. The ACCC also issued draft indicative prices for the service.
The ACCC has invited interested parties to make written submissions on the draft declaration by 17 September 2007. A final declaration decision will be issued by 31 October 2007.
ACCC begins public consultation on Telstra's LCS and WLR exemption applications
The ACCC issued a discussion paper on Telstra’s applications for exemption from the standard access obligations for the local carriage service (LCS) and the wholesale line rental (WLR) service.
Telstra lodged its exemption application on 9 July 2007, seeking exemption in 371 metropolitan exchange service areas. Telstra argues that competitive infrastructure in these areas is sufficient to make regulation of these services no longer necessary.
As part of assessing the exemption applications, the ACCC is inviting interested parties to respond to issues raised in the discussion paper. The ACCC is seeking comment on issues relevant to the consideration of the exemption applications, including on:
whether 'enduring bottlenecks' continue to exist
market definition
the current and potential state of competition in upstream and downstream markets
the effect of the exemptions on incentives for efficient investment.
The ACCC will consider submissions lodged with it by Thursday, 18 October 2007.
On 21 August 2007 Mr Michael Cosgrove, General Manager Communications, gave a speech at the AFR Broadband conference in Sydney. The key message of the speech was that keeping abreast of technological change and other developments in the telecommunications industry was a key challenge for the ACCC. He noted that the ACCC was working to ensure that despite these changes regulation remains targeted and effective and promotes the long-term interests of end users.
The full text of Mr Cosgrove's speech can be found here.
The ACCC released its annual report on telecommunications market indicators. The market indicator report shows that:
In 2005–06 the five largest service providers earned around $18.1 billion from retail services.
Internet and mobile services have each contributed to the continued growth in reported retail revenues, and have offset reductions in fixed-line revenues—despite line rental revenues also declining for the first time in 2005–06.
Among the major five service providers, market shares remained relatively steady in 2005–06, with Telstra earning around 60 per cent and Optus earning around 26 per cent of reported retail revenues.
Telstra's retail market share remained strongest in fixed-line services, where in 2005–06 Telstra earned around 75 per cent of reported revenues.
On 31 August 2007 the AER released its draft decision on SP AusNet’s transmission determination for the period from 1 April 2008 to 31 March 2014. The draft decision approves revenues for SP AusNet that increase from $410.6 million in 2008–09 to $513.3 million in 2013–14. On average, this allowed revenue is around 7.49 per cent less than SP AusNet’s proposed revenue of $419.5 million in 2008–09 increasing to $570.4 million in 2013–14.
The draft determination provides for $732.5 million-worth of investment in SP AusNet's electricity transmission network over the next six years. A total operating and maintenance allowance of over $929.5 million was allowed for the regulatory period, increasing from $142.1 million in 2008–09 to $167.7 million in 2013–14. The determination also provides for a service target performance incentive scheme to apply to SP AusNet, and sets out negotiated transmission service criteria, a negotiating framework and pricing method for SP AusNet for the first time.
A pre-determination conference on this draft decision will be held in Melbourne on Tuesday, 11 September 2007 to explain its draft decision and receive oral submissions from interested parties. Information about the pre-determination conference is available on the AER website.
The AER invites written submissions from interested parties. Submissions close on 14 November 2007. Issues raised at the pre-determination conference and in submissions will be taken into consideration in reaching the final decision.
Documents associated with the transmission determination, including the draft decision, consultant’s reports and SP AusNet’s proposals are available on the AER website.
ElectraNet transmission determination
On 29 June 2007 the AER published ElectraNet’s revenue proposal, proposed negotiating framework and pricing method for the period from 1 July 2008 to 30 June 2013 for consultation.
Submissions on ElectraNet’s revenue proposal, proposed pricing method and negotiating framework closed on 17 August 2007. Seven submissions were received from interested parties. Issues raised in submissions will be considered in reaching a draft decision. The AER will make its draft decision on or before 30 November 2007.
Documents associated with the transmission determination—including submissions from interested parties, ElectraNet’s revenue proposal and its attachments, the proposed pricing method and the negotiating framework—can be found on the AER website.
Service target performance incentive scheme
The AER released its final transmission service target performance incentive scheme and final decision on 31 August 2007 as required under chapter 6A of the National Electricity Rules (NER). The final decision sets out the reasons for the scheme.
The scheme provides an economic incentive mechanism to encourage transmission network service providers (TNSPs) to improve or maintain their service performance levels. The final service target performance incentive scheme and final decision are available on the AER website.
The AER will commence a review of the parameters that apply to TransGrid, Transend and EnergyAustralia (which are due to lodge revenue proposals by 31 May 2008) under the scheme immediately and finalise the scheme to apply to those TNSPs on or before 1 April 2008. This review will be undertaken in accordance with the transmission consultation procedures set out in the NER.
Gas code decisions
Dawson Valley pipeline access arrangement
On 23 August 2007 the ACCC released its final decision under the National Third Party Access Code for Natural Gas Pipeline Systems (gas code) with respect to the access arrangement proposed for the Dawson Valley pipeline by Anglo Coal (Dawson) Limited, Anglo Coal (Dawson Management) Pty Ltd and Mitsui Moura Investment Pty Ltd, the service providers of the DVP.
The ACCC’s final decision, pursuant to s. 2.16(b)(i) of the gas code, is to approve the revised access arrangement as lodged on 23 July 2007 by the DVP service providers. On 23 May 2007 the ACCC made its draft decision proposing not to approve the proposed access arrangement, and proposed 16 amendments.
In response to the draft decision and submissions from interested parties, the DVP service providers lodged a revised access arrangement that implemented or otherwise addressed the proposed amendments.
Documents associated with the access arrangement, including the ACCC’s final decision, are available from on the AER website.
Ring fencing compliance 2006–07
Under s. 4 of the gas code, all gas transmission pipeline service providers are required to submit ring-fencing compliance reports to the ACCC at the end of each financial year.
The ACCC has received compliance reports relating to 2006–07 from all the service providers. This information will be assessed against the minimum ring-fencing obligations in the gas code.
The ACCC expects to release its assessment of the ring-fencing compliance report for 2006–07 in late 2007.
Review of trigger mechanisms
The access arrangement for the Carpentaria Gas Pipeline (CGP, also known as the Ballera to Mt Isa pipeline) began on 1 October 2002 for an initial period of 20 years—set by the Queensland Government—while the access arrangement for the Amadeus Basin to Darwin pipeline (ABDP) began on 28 March 2003 for an initial period of 10 years.
The gas code provides that for an access arrangement longer than five years, the ACCC must consider whether any mechanism would trigger an early review of the access arrangement. The ACCC recently sought submissions from the service providers of the CGP and ABDP and other interested parties on whether any event had occurred that might trigger a review of either access arrangement.
The service provider of the CGP—the APA Group—was the only party to lodge a submission. The APA Group submitted that no trigger event had occurred to date, but noted that the potential reversal of flow on the south-west Queensland pipeline may lead to the introduction of a new source of gas from south-east Queensland. The ACCC has since received further information regarding the CGP. The trigger event mechanism is still under consideration.
Three submissions were received regarding the ABDP. All submissions stated that no trigger event has occurred to date, but it was further submitted that an event might occur in future because of the introduction of gas into the Northern Territory from the Blacktip field in the Bonaparte Basin.
The ACCC has reviewed the submissions and other market information, and has concluded that no event has occurred that would trigger a review of the ABDP access arrangement at this time.
Documents associated with these and past trigger reviews are available on the AER website.
Markets
National electricity market compliance monitoring
On 9 August 2007 the AER released its quarterly compliance report for April to June 2007, detailing its monitoring and enforcement activities during that period. The report also provides an overview of the results of investigations conducted by the AER, which were published separately, and the results of the AER’s targeted compliance program.
Statement on compliance and enforcement
On 29 August 2007 the AER released a publication, Compliance and enforcement—Statement of approach, explaining the AER's enforcement obligations, its approach to monitoring compliance with the NER and the enforcement options available.
The AER aims to provide greater transparency about its compliance and enforcement program. The statement of approach will assist market participants to understand their obligations and encourage compliance with the NER.
In developing its approach, the AER undertook a comprehensive risk assessment. The AER reviewed each of the 1500 obligations in the rules and assessed the probability an obligation would be breached, and the impact any breach would be likely to have on the National Electricity Market. The AER has used this risk assessment to help determine what monitoring mechanism to use for each rule obligation, the intensity of monitoring and the enforcement response where breaches are identified.
The statement of approach explains the method used by the AER in carrying out its risk assessment and how the risk assessment has been used.
The AER publishes reports on the outcome of its monitoring, compliance and enforcement activities every quarter. The reports, and the statement of approach, are available on the AER website.
