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 did not commence the arbitration of any new access disputes this month.
Access undertakings
No access undertakings were lodged with the ACCC in October.
Declared services
ACCC issues final decision on regulation of the line sharing service
On 29 October 2007 the ACCC issued a final decision in its Review of the line sharing service declaration. The ACCC’s final decision is to regulate the LSS on a national basis until 31 July 2009. This decision will reconsidered as part of the ACCC’s comprehensive review of fixed line services, which will commence in 2008.
The ACCC has also released pricing principles and indicative prices for the LSS. The LSS monthly charge is $2.50 per service per month, which is consistent with the charges issued in recent LSS arbitrations and final determinations. Single connection and disconnection charges have been revised upwards from those recent decisions, reflecting updated cost data provided by Telstra.
The full determination can be viewed on the ACCC website.
ACCC seeks submissions on draft unconditioned local loop service pricing principles
The ACCC is seeking further consultation on the appropriate prices for the unconditioned local loop service (ULLS).
The ACCC first consulted on draft ULLS pricing principles in July 2006, following the declaration of the ULLS as part of the ACCC's strategic review of the regulation of fixed network services. However, it did not finalise the ULLS pricing principles at this because a number of ULLS pricing issues were being considered in undertakings and subsequently on appeal to the Australian Competition Tribunal.
The ACCC is now moving to finalise the ULLS pricing principles. Any interested party wishing to make a submission or an additional submission on the draft ULLS pricing principles should do so by close of business on Tuesday, 6 November 2007.
More information on the on this matter can be found on the ACCC website.
ACCC begins public consultations on Telstra's exemption applications for fixed line services
On 31 October 2007 the ACCC issued two discussion papers relating to fixed line service exemption applications from Telstra.
The first discussion paper relates to Telstra's applications for exemption from the standard access obligations for the public switched telephone network originating service (PSTN OA). Telstra has sought exemption in a total of 404 exchange service areas, comprising 17 ESAs in central business district areas and 387 ESAs in metropolitan areas.
The second discussion paper relates to Telstra's applications for exemption from the standard access obligations for the local carriage service and wholesale line rental service in 16 ESAs in metropolitan Australia. These exemption applications follow Telstra's earlier applications for LCS and WLR exemptions in 371 ESAs, lodged with the ACCC in July.
Telstra submits that there is sufficient competitive infrastructure in the proposed exemption areas such that regulation of these services is no longer necessary.
The ACCC must decide within six months whether granting Telstra the exemptions from its standard access obligations in the proposed exchange areas would be in the long-term interests of end users
The ACCC will consider submissions in response to the two discussion papers, which should be lodged with the ACCC by Friday, 14 December 2007.
More information and the discussion papers are available on the ACCC website.
Premium SMS service provider B33hive Pty Ltd has changed its radio advertising after the ACCC raised concerns that its radio advertisements failed to adequately refer the consumer to the terms and conditions of the competition, which are available on the internet. Further it was not made clear that by entering the competition, the consumer was accepting an ongoing SMS subscription for which they would be charged.
Once contacted, B33hive actively worked towards addressing the ACCC's concerns. Specifically, B33hive has amended its radio advertising and internet pages so that the conditions of entering the reverse auction are clear to consumers from the outset.
On 29 October 2007 the AER released its final pricing methodology guidelines relating to:
the information requirements of a transmission pricing methodology
the locational component of transmission charges
the non-locational component of transmission charges
the allocation of assets necessary to derive prices
confidentiality provisions.
In making its final decision the AER has taken into account submissions from interested parties.
The National Electricity Rules (NER) require the AER to develop pricing methodology guidelines. The guidelines will assist transmission network businesses in the development of pricing methodologies that the AER will assess. The guidelines are part of a suite of transmission guidelines developed by the AER.
The final guidelines and related documents are available on the AER website.
Gas Code decisions
For September 2007
Moomba to Adelaide pipeline system coverage revocation
Following a decision by the South Australian Minister for Energy, effective 30 September 2007, the Moomba to Adelaide pipeline system is no longer a covered pipeline under the Gas Pipelines Access Law or the under the National Third Party Access Code for Natural Gas Pipeline Systems. This decision means that MAPS is no longer regulated by the ACCC.
The minister’s decision to revoke the MAPS coverage is available online.
Moomba to Sydney pipeline High Court decision
On 27 September 2007 the High Court of Australia handed down its judgment regarding the Moomba to Sydney pipeline access arrangement, in which it reinstated the Australian Competition Tribunal’s decision. The earlier tribunal decision rejected the access arrangement that the ACCC approved for the MSP in December 2003.
The High Court’s judgment and the ACCC’s access arrangement are available online.
Markets
State Electricity Commission of Victoria $60 000 penalty
On 29 October 2007 the AER imposed a penalty of $60 000 on the State Electricity Commission of Victoria (SECV), trading as Vicpower Trading.
Vicpower Trading offers frequency control services into the National Eectricity Market on behalf of an aluminium smelter at Point Henry, Victoria. The smelter's three potlines are separately registered by the National Electricity Market Management Company to provide frequency services.
On 16 January 2007 bushfires caused the main transmission links into Victoria to fail, interrupting electricity supplies to the smelter. The smelter shut down and was unavailable to provide frequency services for more than 30 minutes.
Vicpower Trading continued to offer frequency control services into the market even though it was unable to provide the services. The AER has reason to believe that the failure by Vicpower Trading to revise its bids following the shutdown of the three smelter loads amounts to a breach of clause 4.9.8(d) of the NER.
The AER issued three infringement notices alleging that Vicpower Trading breached clause 4.9.8(d) of the NER by failing to ensure that at all times it was able to comply with the latest market ancillary service offer with respect to its ancillary service loads PTH01, PTH02 and PTH03 when all ancillary service loads were shutdown. An infringement penalty of $20 000 for each breach was imposed on SECV under clause 4.9.8(d) of the NER.
Further information about the decision is available on the AER website.
On 31 October 2007 the ACCC issued its 2006–07 container stevedoring monitoring report, which covers prices, costs and profitability of container terminal operators at the ports of Adelaide, Brisbane, Burnie, Fremantle, Melbourne and Sydney.
The report shows average revenues and costs for stevedoring activities fell while productivity levels improved. This contrasts with a trend over recent years of rising unit revenues and costs and falling productivity. In real terms, the pattern of decreasing real unit revenues and costs has continued since the late 1990s, following reforms undertaken on the waterfront.
Lower unit costs were largely attributable to the cessation of the stevedoring levy from the end of May 2006 and lower unit labour costs that offset higher equipment costs associated with capital works. Information provided by the stevedores indicates that the industry is continuing to invest in new assets and additional future terminal capacity.
Lower unit revenues were reported for both stevedoring and non-stevedoring operations at the terminals. However, the overall decline in unit revenues was mostly due to the lower revenues collected from non-stevedoring activities (in particular, from storing containers at terminals).
Profitability as measured by an average rate of return on assets increased slightly in 2006–07 and remains at a high level. This is in contrast to much lower levels of profitability reported by the stevedoring industry during the period prior to the waterfront reforms.
The report highlights that current industry approaches to expanding port capacity could potentially provide opportunities, to varying degrees, for greater competition ‘in’ the market for stevedoring services. Opportunities for competition in the market are all the more significant given that port managers do not tend to invite competitors to bid for the leases that incumbents hold as their terms end.
The ACCC noted that land-side efficiency continues to be a major challenge at most container terminals and that some port managers and state governments are directing more attention to land-side access issues. Responses to land-side problems that potentially involve cooperation and coordination among industry players may, in some cases, raise trade practices issues. Where such schemes provide an overall public benefit, they can, in certain circumstances, be authorised under the Trade Practices Act. Parties are encouraged to consult with the ACCC early and before implementation to address any potential trade practices concerns.
The full report can be viewed on the ACCC website.
