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.
Declaration review—Digital Data Access Service and Integrated Services Digital Network
On 4 June 2008 the ACCC issued its final report on declaration of the Digital Data Access Service and Integrated Services Digital Network services and accompanying pricing principles with respect to these services. The final decision extends regulation of the DDAS and ISDN services in regional areas and outlines an extension of the declarations of these services until 30 June 2009.
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.
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.
Telstra’s unconnected local loop service undertaking
The ACCC issued a discussion paper in June 2008 considering Telstra’s revised undertaking submitted to the ACCC in March 2008 (by withdrawing its previous submission dated 21 December 2007). The undertaking proposes a monthly charge of $30 for each Telstra unconnected local loop service (ULLS) connected at an exchange building in a band 2 exchange service area. The ACCC encourages the interested parties to respond.
On 4 June 2008 the ACCC set final copper local loop indicative prices for 2008–09. The final indicative prices for the ULLS monthly charge are to apply from 1 July 2008 to 31 July 2009, with an increase from the previous period to reflect the rise in interest rates and input costs.
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 June 2008 eight new access disputes were notified to the ACCC under Part XIC of the Trade Practices Act 1974. They are between:
Primus Telecommunications Pty Ltd and Telstra Corporation Ltd
Optus Networks Pty Ltd and Telstra Corporation Ltd (two separate disputes)
XYZed Pty Ltd and Telstra Corporation Ltd
Request Broadband Pty Ltd and Telstra Corporation Ltd
PowerTel Limited and Telstra Corporation Ltd
Chime Communications Pty Ltd and Telstra Corporation Ltd
Macquarie Telecom Pty Ltd and Telstra Corporation Ltd
These access disputes are related to the supply of ULLS by Telstra Corporation Ltd. These access disputes relate to monthly rental, connection and other charges to be paid to Telstra by the access seekers. Optus also notified a dispute related to the terms and conditions on which Telstra supplies interconnection facilities to enable Optus to acquire the ULLS.
In June 2008 the ACCC made nine interim determinations about the ULLS. The ACCC did not make any final determinations in the arbitration of these disputes. However, the ACCC continues to arbitrate 51 access disputes, of which 18 are in judicial reviews.
In June 2008 two annual statutory reports prepared by the ACCC on telecommunications competitive safeguards and changes in the prices paid for telecommunications services under Part XIB of the Trade Practices Act (known as Division 11 and Division 12) were tabled in parliament.
These reports show that overall prices for telecommunications services fell in real terms by 2.7 per cent, average prices for fixed-line services fell by 3 per cent and average prices for mobile services fell by 2.3 per cent during 2006–07. This period also showed the highest level of investment in telecommunications in the 10 years since the introduction of competition.
On 30 June 2008 the ACCC published the Telstra accounting separation report for the March quarter 2008. The report tests whether there is systematic discrimination in the price or non-price terms offered to Telstra’s wholesale and retail customers, and provides general guidance on the potential for competing service providers to supply consumers. The report notes that in the March quarter 2008, imputed margins generally remained steady, with only margins on fixed-to-mobile service declining significantly, and that wholesale residential customers received inferior service for basic access connections requiring work at the customer premises.
ACT and NSW electricity distribution regulatory proposals
On 27 June 2008 the AER published regulatory proposals from EnergyAustralia, Country Energy, Integral Energy and ActewAGL about distribution about their respective electricity distribution networks.
Under the National Electricity Rules (NER), the AER is required to make distribution determinations about these businesses that will establish network charges for the period 2009–14. The AER intends to hold public forums on the proposals submitted by the distribution network service providers
Canberra, Tuesday, 29 July (ActewAGL)
Sydney, Wednesday, 30 July (New South Wales DNSPs).
The public forums will provide an opportunity for each DNSP to explain its regulatory proposal. Stakeholders will also have an opportunity to ask questions about the proposals.
Documents associated with the Australian Capital Territory and New South Wales distribution determination process, including regulatory proposals, proposed pricing methodologies and proposed negotiating frameworks, can be found on the AER website.
The AER invites written submissions in response to these DNSP proposals.
On 27 June 2008 the AER published TransGrid’s revenue proposal, proposed negotiating framework and proposed pricing methodology for the period 1 July 2009 to 30 June 2014 for consultation.
Under the NER, the AER is required to make a transmission determination for TransGrid that will establish network charges for the period 2009–14. The AER intends to hold a public forum on TransGrid’s proposal in Sydney on Wednesday, 30 July 2008. The public forum will provide an opportunity for TransGrid to explain its proposal. Stakeholders will also have an opportunity to ask questions about the regulatory proposals.
Documents associated with the TransGrid regulatory determination process, including TransGrid’s revenue proposal, proposed pricing methodology and proposed negotiating framework, can be found on the AER website.
The AER invites written submissions in response to TransGrid’s regulatory proposal.
On 27 June 2008 the AER published Transend’s revenue proposal, proposed negotiating framework and proposed pricing methodology for the period 1 July 2009 to 30 June 2014 for consultation. Under the NER, the AER is required to make a transmission determination for Transend that will establish network charges for the period 2009–14. The AER intends to hold a public forum on Transend’s proposal in Hobart on Wednesday, 6 August 2008. The public forum will provide an opportunity for Transend to explain its proposal. Stakeholders will also have an opportunity to ask questions on the regulatory proposals.
Documents associated with the Transend regulatory determination process, including Transend’s revenue proposal, proposed pricing methodology and proposed negotiating framework, can be found on the AER website.
The AER invites written submissions in response to Transend’s regulatory proposal.
Submissions close on Monday 11 August 2008.
Release of final guidelines for the national regulation of electricity distribution businesses
On 26 June 2008 the AER, in its new role in the national regulation of electricity distribution businesses under the National Electricity Law and NER, released final guidelines comprising:
cost allocation guidelines
the post-tax revenue model
the roll forward model
an efficiency benefit sharing scheme and
a service target performance incentive scheme.
Queensland and South Australian electricity distribution businesses will be the first to be regulated under the AER’s new national guidelines in respect of distribution determinations for these businesses for the 2010–15 regulatory control period. Similar arrangements will apply to distribution determinations for New South Wales and the Australian Capital Territory for the 2009–14 regulatory control period.
A copy of the guidelines is available on the AER website.
Energex and Ergon Energy—AER releases preliminary framework and approach papers
The AER is preparing to undertake distribution determinations for Energex and Ergon Energy, distribution network service providers in Queensland, to apply during the 2010–15 regulatory control period.
The NER require the AER publish framework and approach papers setting out its likely approach to the application of schemes to Energex and Ergon Energy.
Specifically, the AER must set out its likely framework and approach to applying a service standards incentive scheme, an efficiency benefit sharing scheme and a demand management incentive scheme to those DNSPs.
On 30 June 2008 the AER began consultation on its framework and approach to the application of schemes for Energex and Ergon, through the release of a preliminary positions paper addressing these schemes.
The AER invites submissions from interested parties on its preliminary positions paper.
Submissions close on 11 August 2008.
The preliminary positions paper can be viewed on the AER website.
ETSA Utilities—AER preliminary framework and approach paper
The AER is preparing to undertake a distribution determination for ETSA Utilities, a distribution network service provider in South Australia, to apply in the 2010–15 regulatory control period.
The NER require the AER publish a framework and approach paper. Within this paper the AER must set out its likely framework and approach regarding the form of control, classification of services and the application of a service target performance incentive scheme, efficiency benefit sharing scheme and demand management incentive scheme to ETSA Utilities.
On 30 June 2008 the AER began consultation on its framework and approach for ETSA Utilities through the release of a preliminary positions paper on these matters.
The AER invites submissions from interested parties on its preliminary positions paper.
Submissions close on 11 August 2008.
The preliminary positions paper can be viewed on the AER website.
Development of a demand management incentive scheme—Queensland and South Australian DNSPs
The AER is preparing to undertake distribution determinations for Distribution Network Service Providers in Queensland (Energex and Ergon Energy) and South Australia (ETSA Utilities) to apply in the 2010–15 regulatory control period. The NER require that the AER must publish framework and approach papers for each DNSP.
On 30 June 2008 the AER released a proposed demand management incentive scheme to apply to the Queensland and South Australian DNSPs. This proposed scheme reflects comments made in submissions on the AER issues paper on DMIS for Queensland and South Australia, which was released on 18 April 2008. The AER invites submissions from interested parties on its proposed DMIS.
Submissions close on 11 August 2008.
The proposed DMIS for application to Energex, Ergon Energy and ETSA Utilities and accompanying explanatory statement are available on the AER website.
Oxiana Prominent Hill distribution loss factor for 2008–09
On 3 June 2008 the AER received an application for approval of the distribution loss factor (DLF) for Oxiana Prominent Hill.
The AER approved the Oxiana Prominent Hill DLF for 2008–09 on 10 June 2008.
Documents associated with the approved DLF are available on the AER website.
Gas Code decisions
Annual tariff variations
On 4 June 2008 the ACCC approved the 2008–09 annual reference tariff variations for the Moomba-to-Sydney, Central West , Roma to Brisbane, Central Ranges and the Dawson Valley pipelines under their respective access arrangements.
Documents associated with the tariff variations are available on the AER website.
GasNet revised access arrangement—final approval by ACCC
On 14 November 2007 the ACCC released a draft decision proposing not to approve GasNet’s proposed revised access arrangement for the principal transmission system.
This draft sets out a range of matters to be addressed before the ACCC can approve the revised access arrangement. GasNet’s response to this draft decision did not fully address all the issues the ACCC had raised. Therefore, on 30 April 2008 the ACCC released a final decision in which it did not accept a number of GasNet’s revisions and proposed amendments.
Following further amendments by GasNet that satisfactorily addressed the issues raised, on 25 June 2008 the ACCC released a further final decision approving GasNet’s revised access arrangements.
Copies of GasNet’s revision application, associated documents, amended revised access arrangement and access arrangement information are available from the AER website.
Copies of the ACCC’s decision documents can also be found on the AER website.
Moomba-to-Sydney Pipeline—extension of time to submit access arrangement revision
On 11 June the ACCC approved an extension of time to 15 December 2008 for the APA Group to submit its revision to the Moomba-to-Sydney Pipeline for the 2009–14 access arrangement period.
The revised access arrangement for the Moomba-to-Sydney Pipeline was to be submitted on 30 June 2008 but the APA Group sought an extension of time to allow it to seek reclassification of the pipeline by National Competition Council as a light regulation pipeline. The current access arrangement continues to apply.
Documents associated with the access arrangement revision are available on the AER website.
Energy markets
National Electricity market quarterly compliance report
The National Electricity Market quarterly compliance report for January–March 2008 was published in June 2008. The report gives an update on the progress of audits on technical performance standards and associated compliance programs conducted by consultants on behalf of the AER. The results of the audit will be published later this year.
The report also contains the outcome of the AER’s targeted compliance reviews. The AER targeted eight provisions under the NER. The report can be viewed on the AER website.
Assessment of draft notification to increase reserved letter prices
Australia Post provided the ACCC with a draft price notification on 5 February 2008. Australia Post propose to increase the price of a number of its reserved mail services (i.e. services over which Australia Post has a statutory monopoly), including increasing the basic postage rate (BPR) from 50 to 55 cents.
The ACCC has a role in assessing Australia Post’s proposed price increases for reserved services under the price notification provisions under Part VIIA of the Trade Practices Act (TPA).
Australia Post also propose to increase the price of other mail services including large and small ordinary letters, large and small pre-sort ordinary letters, clean mail, reply paid mail, impact mail and local delivery mail. The proposed price increases are the first for the BPR and other ordinary letters since January 2003 and the first general increase to pre-sort letters since January 1992.
On 20 June 2008 the ACCC released a preliminary view in which it does not object to Australia Post’s proposed price increases. This preliminary view is designed to help Australia Post structure future price notifications to provide more certainty to users of Australia Post’s postal services and to ensure that Australia Post has strong incentives to reduce costs and increase productivity over time.
Taking account of interested parties’ views on the preliminary view, the ACCC will form a final decision on the proposed price increases under the price notification provisions of the TPA.
