The Australian Competition and Consumer Commission today issued a draft decision proposing to grant Telstra exemptions from its obligations to supply public switched telephone network originating access (PSTN OA) services in five CBD areas and parts of metropolitan Australia.
The proposed exemptions, which cover 15 CBD and 248 metropolitan exchange service areas (ESAs), are not as broad as those requested by Telstra. Further, the draft decision relates only to wholesale voice services, not broadband services which are not subject to open access regulation.
The proposed exemption is consistent with the ACCC's recent decision to grant Telstra conditional exemptions in respect of the supply of the LCS and WLR in 248 ESAs*.
The ACCC's draft view is that PSTN OA services no longer represent an "enduring bottleneck" in the areas subject to exemption. This is primarily because access seekers are able to use their own DSLAM or MSAN facilities to provide voice services by making direct use of Telstra's unbundled copper through the declared Unconditioned Local Loop Service (ULLS). In the case of the CBD areas, the ACCC notes there is also significant alternative infrastructure present in these areas for supplying voice services.
The proposed exemptions would be subject to a number of draft conditions dealing with impediments faced by some access seekers when seeking to use the ULLS. These conditions are consistent with those the ACCC placed on the granting of the LCS and WLR exemptions.
The ACCC's draft decision on Telstra's exemption applications will be available on the ACCC website.
The ACCC is inviting interested parties to respond to the issues raised in the draft decision by 26 September 2008.
The PSTN OA is a wholesale service. The PSTN OA is used by access seekers to supply a range of voice-grade calls, including international, national long distance and fixed to mobile calls.
On 8 October 2007, Telstra lodged two applications with the ACCC under section 152AT of the Trade Practices Act 1974 seeking individual exemptions from the Standard Access Obligations (SAOs) for PSTN OA.
The first application seeks the removal of PSTN OA regulation in 17 ESAs in 5 CBD areas of Sydney, Melbourne, Brisbane, Adelaide and Perth. The second application seeks the removal of PSTN OA regulation in 387 ESAs across metropolitan Australia.
The ACCC has the power in section 152AT of the Act, upon application by a carrier or carriage services provider, to make an order exempting the carrier or carriage service provider from the SAOs for a declared service. The ACCC also has power under section 152AS of the Act to determine that the members of a specified class of carrier or class of carriage service provider are exempt from the SAOs for a declared service. The ACCC must not make such an exemption order or determination unless it is satisfied that granting the exemption will promote the long-term interests of end users (LTIE) as defined in section 152AB of the Act. An exemption order may be unconditional or subject to such conditions or limitations as are specified in the order.
In coming to its draft decision, the ACCC recognised that determining the precise sub-set of ESAs where ULLS-based entry and effective competition in fixed voice services is likely to occur upon granting exemptions was a finely balanced process – one which took into account the actual competition within each ESA as well as the potential for increased competition. The sub-set of ESAs determined by the ACCC to be subject to the proposed exemption are those in which there are 14,000 or more addressable services in operation or four or more ULLS-based competitors (including Telstra), subject to a number of conditions and limitations.
