ACCC begins public consultation on Telstra's exemption application relating to Optus' HFC network

The Australian Competition and Consumer Commission today issued a discussion paper on Telstra's application for exemption from its obligations to supply a range of telecommunications services to Optus in areas of Sydney, Melbourne and Brisbane where Optus has deployed its HFC network. Telstra lodged its exemption application with the ACCC on 18 December 2007.

In support of its exemption application, Telstra submits that granting the exemption will promote competition by encouraging Optus to invest in and more fully utilise its HFC network. As a result, Telstra contends that granting the exemption will lead to better prices, quality and choice for end-users.

Under the Trade Practices Act 1974, the ACCC must decide within six months whether granting Telstra the exemption would be in the long-term interests of end-users.

Contrary to recent media reports, the ACCC has not made any decision on Telstra's exemption application and will assess the application on its merits. The release of the discussion paper represents the first step in the ACCC's assessment process.

As part of assessing the exemption application, the ACCC is inviting interested parties to respond to issues raised in the discussion paper such as:

• the extent to which Optus uses regulated access to Telstra's fixed line network within its HFC footprint, and
• the technical and economic factors relevant to Optus' ability to upgrade its HFC network within its current footprint.

The discussion paper as well as Telstra's application and supporting materials will be available at www.accc.gov.au.

The ACCC will consider submissions lodged with the ACCC by Tuesday, 25 March 2008.

Background

Following the ACCC's decision to regulate a service under Part XIC, standard access obligations exist for any carrier 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 LTIE of the carriage services, or services provided by means of carriage services.

The current exemption application from Telstra relates to exemption from the standard access obligations in respect of supply of the unconditioned local loop service (ULLS), line sharing service (LSS), local carriage service (LCS), wholesale line rental service (WLR), and PSTN originating access service (PSTN OA) to Optus in a defined geographic area of any customer premises within 75 metres of Optus' currently deployed HFC network in Sydney, Melbourne and Brisbane.