ACCC begins public consultation on Telstra's transmission capacity exemption application

The Australian Competition and Consumer Commission today issued a discussion paper on Telstra's application for exemption from standard access obligations in respect to the domestic transmission capacity service on specified routes.

Telstra has sought the exemption in 20 capital-regional routes, arguing that there is sufficient competitive infrastructure in these areas such that regulation of these services is no longer necessary. 

Under the Trade Practices Act 1974, the ACCC must decide within six months whether granting Telstra the exemptions from its standard access obligations in the 20 capital-regional routes would be in the long-term interests of end users (LTIE). 

"The ACCC will be inclined to progressively withdraw access regulation where sustainable effective competition has emerged and continued declaration would no longer promote the LTIE," ACCC Chairman, Mr Graeme Samuel, said today.

As part of assessing the exemption applications, the ACCC is inviting interested parties to respond to issues raised in the discussion paper.

The ACCC will consider submissions lodged with the ACCC by 9 November 2007.

Background

The domestic transmission capacity service is a generic service that can be used for the carriage of voice, data or other communications using wideband or broadband carriage. The service was declared in June 1997 and varied in November 1998, May 2001 and April 2004.

Following the ACCC's decision to regulate a service under Part XIC, standard access obligations exist for any carriers or carriage service provider providing that service, whether to themselves or to other persons. The obligations include the requirement that the regulated service must be provided to service providers, along with specified ancillary services, on request.

A carrier can apply to the ACCC for a written order exempting it from any, or all, of the standard access obligations that apply to a regulated service. In deciding whether to make an order, or not, the ACCC must consider whether it will promote the long-term interests of end-users of the carriage services, or services provided by means of carriage services.

In its 2004 transmission capacity inquiry, the ACCC proposed that routes which have at least three optical fibre suppliers either serving these regional centres or in very close proximity (within 1km or less from the GPO of a regional centre for a given capital-regional route) be exempted from declaration.

In support of its exemption application Telstra has proposed that a carrier with an optical fibre network within a distance (from the regional centre) of 5 per cent of the route distance between the capital city and the regional centre should be counted as a competitor in the market.

The ACCC will examine the Telstra proposal in light of the submission received in response to the discussion paper.