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 Trade Practices Act enables carriers to apply for exemptions from the standard access obligations that apply to a declared service. The ACCC can only grant exemptions where they promote the long term interests of end users.
ACCC proposes to grant Telstra local carriage service (LCS) and wholesale line rental (WLR) exemptions.
On 29 April 2008 the ACCC issued a draft decision proposing to grant Telstra exemptions from its obligations to supply two 'declared' services in parts of metropolitan Australia. The decision relates only to wholesale voice services, not broadband services, which are not subject to open access regulation. Submissions are due by 27 May 2008.
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.
Pricing principles determination for the unconditioned local loop service amended
On 23 April 2008 the ACCC released for consultation an amended pricing principles determination for the unconditioned local loop service (ULLS) and an accompanying report.
The amended determination now includes indicative prices for the ULLS to apply through to July 2009. Interested parties are invited to make submissions by 14 May 2008.
Draft pricing principles determination and indicative prices for the wholesale line renal service and local carriage service
On 23 April 2008 the ACCC released a draft pricing principles determination and indicative prices for the WLR service and LCS. The draft pricing principles and indicative prices are relevant for the period 1 January 2008 to 31 July 2009, the date at which the declarations are due to expire. These reports are available on the ACCC website. Interested parties are invited to make submissions by 14 May 2008.
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.
New access disputes
In April 2008 a new dispute was reported to the ACCC between Netspace Networks Pty Ltd and Telstra about the supply of line sharing services (LSS).
In April 2008 the ACCC made three final determinations regarding disputes over access to the ULLS. These were between Chime Communications and Telstra, Optus Networks and Telstra, and Primus and Telstra. The ACCC also made one interim determination regarding a dispute over LSS between Netspace Networks and Telstra in April 2008.
ACCC issues final telecommunications transmission cost model to guide pricing of the service
On 16 April 2008 the ACCC issued the final version of a telecommunications transmission cost model to guide pricing of the service. The model has been designed with the flexibility to calculate cost-based pricing for backhaul on any land-based (terrestrial) or undersea (submarine) telecommunications transmission route in Australia.
The ACCC will use this model to assess the costs of supplying transmission services in different regions of Australia as it carries out its regulation of transmission services and arbitration of access disputes.
Draft legislative instruments on digital radio access regime
On 11 April 2008 the ACCC issued draft legislative instruments—decision-making criteria and procedural rules—seeking stakeholder views on a digital radio access regime.
Submissions were due by 28 April 2008. After final decision-making criteria and procedural rules are issued, the ACCC will hold a public consultation process on the access undertakings, once received from multiplex licensees.
ACCC issues Telstra accounting separation report for December quarter 2007
On 10 April 2008 the ACCC issued its eighteenth report under the enhanced accounting separation regime for Telstra. The latest report includes two main aspects:
an imputation analysis testing whether sufficient margins exist to allow enough firms to acquire three core access services from Telstra to compete against Telstra in the retail market
key performance indicators concerning or repairing faults on wholesale and retail fixed line telephony and ADSL services.
ACCC issues tenth Telstra accounting separation current cost report
On 29 April 2008 the ACCC issued the tenth current cost accounting report relating to Telstra for the period of July–December 2007. The report provides Telstra's current cost valuations of its assets, compared with the historical or original costs of these assets. The report also includes profit and loss and capital employed statements on a current cost basis.
Queensland distribution determination 2010 to 2015
On 31 March 2008 the Australian Energy Regulator received proposals from Energex and Ergon Energy relating to the classification of services and control mechanisms to apply for the next regulatory control period (1 July 2010 to 30 June 2015). The AER must publish its framework and approach paper on these matters by 31 August 2008.
Clause 11.16.6 of the National Electricity Rules (NER) permitted Energex and Ergon Energy to submit proposals to the AER in relation to the classification of services and the control mechanisms to apply for the next regulatory control period by 31 March 2008. This transitional arrangement is unique to Energex and Ergon Energy.
In response to Energex and Ergon Energy's proposals the AER received one submission from Origin Energy.
The distribution network service providers (DNSPs) proposals, Origin Energy’s submission and further information about the process the AER must follow in making the Queensland distribution determinations are available from the AER website.
Issues paper on a demand management incentive scheme for distribution network service providers (Queensland and South Australia)
The AER is preparing to undertake determinations for DNSPs in Queensland and South Australia to apply in the 2010–15 regulatory control period. To assist in developing framework and approach papers in for these determinations, the AER has released an issues paper on the potential development of a demand management incentive scheme to apply to Energex, Ergon Energy and ETSA Utilities. The issues paper discusses whether a DMIS should be developed and, if so, what form it should take.
Submissions on the issues paper close on 16 May 2008. The issues paper is available on the AER website.
Release of proposed regulatory arrangements for electricity distribution businesses
On 1 April 2008 the AER issued proposed guidelines, models and schemes to assist it with the national regulation of electricity distribution businesses. The documents were issued for public comment, as required under the NER.
The following proposed guidelines, models and schemes were released:
post-tax revenue model
roll forward model
efficiency benefit sharing scheme
service target performance incentive scheme
cost allocation guidelines.
Copies of the proposed guidelines, models and schemes and related material are available on the AER website.
The AER hosted a public forum in Melbourne on 23 April 2008 to discuss the proposed regulatory arrangements, and has invited written submissions on the proposed guidelines, models and schemes by 14 May 2008.
The AER will issue the final guidelines, models and schemes by 30 June 2008.
Preparations—2009 distribution determinations for distribution network service providers (Australian Capital Territory and New South Wales)
On 31 March 2008 the AER approved the cost allocation methods to be used by ActewAGL, Country Energy, EnergyAustralia and Integral Energy in their regulatory proposals for the 2009–14 regulatory control period. The regulatory proposals are to be submitted to the AER by 2 June 2008.
Approval of the cost allocation methods is the first decision made by the AER as part of its first distribution determination in New South Wales and the Australian Capital Territory, and is a new requirement of the NER that took effect from January 2008.
On 24 April 2008, following consultation with DNSPs in New South Wales, the AER provided a regulatory information notice to each business. The regulatory information notices set out information that must be submitted by each DNSP with their regulatory proposals.
The AER's decision documents, public versions of the DNSPs’ cost-allocation methods and the regulatory information notices will be made available on the AER website.
Service standards compliance review for 2007
On 28 April 2008 the AER released the outcome of its service standards compliance review for the 2007 calendar year. AER staff and the AER’s expert consultants, Sinclair Knight Merz (SKM), reviewed the reporting systems and results for eight transmission network service providers (TNSPs).
Documents associated with the AER’s service standards compliance review for 2007 including the consultants’ reports and TNSP’s submissions are available on the AER website.
ElectraNet final decision and transmission determination
On 30 April 2008 the AER released its final decision and transmission determination for ElectraNet relating to the regulatory control period 1 July 2008 to 30 June 2013. The AER has approved a maximum allowed revenue (MAR) for ElectraNet that increases from $226 million in 2008–09 to $304 million in 2012–2013 ($nominal). The total revenue cap for ElectraNet over the next regulatory control period is $1319 million. The revenue cap is based on a post tax nominal return on equity of 12.20 per cent and an opening regulated asset base of around $1.265 million.
The final decision provides for investment of $650 million in ElectraNet's electricity transmission network over the next five years, an increase of more than 45 per cent from the investment over the past five years. A further investment allowance of $894 million is provided should defined project triggers occur. The AER also determined a total operating and maintenance allowance of $299 million for the regulatory control period.
Documents associated with the final decision, transmission determination, consultants’ reports and ElectraNet’s revised proposals are available on the AER website.
Draft decision on the Australian Rail Track Corporation’s interstate rail access undertaking
On 29 April 2008 the Australian Competition and Consumer Commission issued a draft decision to accept the Australian Rail Track Corporation’s interstate access undertaking. This draft decision is subject to ARTC addressing a number of issues raised by the ACCC.
ARTC was established in 1998 to manage the infrastructure of and access to the standard gauge rail network connecting the mainland cities between Brisbane and Perth. In May 2002 the ACCC accepted an access undertaking from ARTC for access to interstate tracks in South Australia, Victoria and part of Western Australia. This undertaking was for five years and expired on 1 June 2007.
On 20 December 2007 ARTC lodged an application with the ACCC to assess its interstate access undertaking (the ‘December undertaking’). This undertaking is a revised version of an earlier undertaking application made by ARTC in June 2007 (the ‘June undertaking’), which was subsequently withdrawn by ARTC in October 2007.
The December undertaking sets out the terms and conditions upon which ARTC will negotiate access to the interstate railway network, including the interstate rail track leased in New South Wales. However, the undertaking does not cover access to the rail tracks in the Hunter Valley coal network. ARTC is expected to lodge a separate access undertaking for the Hunter Valley coal rail network with the ACCC during 2008.
The ACCC has asked ARTC to address a number of price and non-price provisions proposed in the December undertaking to ensure a balance of interests between the access provider (i.e. ARTC), access seekers and the public interest. The ACCC has recommended that ARTC:
make it clear, as an objective within the preamble, that a key objective of the undertaking is to facilitate access to the interstate network
provide further detail on the scope of the New South Wales-leased network and include maps in the undertaking that delineate and clarify the coverage of the network covered by the undertaking
specify, in accordance with the Trade Practices Act 1974, that the undertaking would take effect 21 days after its acceptance by the ACCC
incorporate provisions relating to the expiry of the undertaking, including the possible extension of its term
include a provision requiring ARTC to undertake a review of the undertaking, in consultation with stakeholders, after five years
incorporate a provision that requires ARTC to provide written reasons to an applicant when ARTC decides to issue a notice of intent to end access negotiations
include a provision that requires ARTC to offer the indicative access agreement to access seekers seeking access to the indicative service during access negotiations
limit the scope for price escalations for indicative services so that price increases may only occur once in a 12-month period
incorporate provisions that specify circumstances when the excess network occupancy charge would not apply
remove the capacity reservation fee
incorporate provisions for greater industry consultation on future additions to network capacity.
The ACCC is seeking submissions on the draft decision from interested parties by 26 May 2008 before it issues a final decision.
