ACCC makes in-principle decision to grant Telstra local carriage service and wholesale line rental exemptions

The Australian Competition and Consumer Commission today made an in-principle decision to grant Telstra exemptions from its obligations to supply two "declared" services in parts of metropolitan Australia, subject to a number of conditions.

The in-principle decision relates only to wholesale voice services, not broadband services - which are not subject to open access regulation.

The proposed exemptions are not as broad as requested by Telstra. They cover 248 exchange service areas. While this has increased from the 229 exchange service areas proposed in the ACCC's draft decision on Telstra's applications, the rationale behind the decision remains broadly the same.

The proposed exemptions are subject to a number of conditions, some of which are additional to those proposed in the ACCC's draft decision on Telstra's applications.

The additional conditions deal with impediments faced by some access seekers when seeking to use the unbundled local loop service. Specifically, these impediments are lengthy queues to enter into Telstra's exchange buildings and service disruptions when migrating from the line sharing service to the unbundled local loop service.

The proposed exemptions are also subject to a condition regarding exchange capping, which varies from the corresponding condition proposed in the ACCC's draft decision.

The form of the conditions together with an explanatory statement of the rationale for the conditions will be available on the ACCC website, www.accc.gov.au.

The ACCC is inviting interested parties to respond to any issues raised by the form of the conditions.

The ACCC will consider submissions lodged with the ACCC by midday Wednesday 20 August. Due to the statutory timeframes involved in making a final decision, it is highly unlikely that the ACCC will be able to consider any submissions made after this time.

The ACCC will issue its final decision after it has consulted on the conditions.

Background

The local carriage service is a wholesale local call service that allows access seekers to resell local calls to end-users.

The wholesale line rental service involves the provision of a basic line rental service that allows an end-user to connect to the public switched telephony network.

The LCS was declared by the ACCC in August 1999 and re-declared in July 2006. WLR was declared by the ACCC in July 2006.

Following the ACCC's decision to declare a service under Part XIC of the Trade Practices Act 1974, standard access obligations exist for any carriers or carriage service providers 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 SAOs 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.

On 9 July 2007, Telstra lodged two exemption applications pursuant to section 152AT of the Act, seeking exemption from its SAOs in relation to supply of WLR and LCS in 371 metropolitan exchange service areas (ESAs). On 12 October 2007, Telstra lodged two further applications for exemption, seeking exemption in a further 16 metropolitan ESAs. In total Telstra sought exemption from its SAOs to supply WLR and LCS in 387 metropolitan ESAs.

On 29 April 2008, the ACCC issued a draft decision proposing to grant Telstra exemptions in parts of metropolitan Australia, subject to a number of conditions.