The Australian Competition and Consumer Commission today issued a final decision to reject Telstra's application for exemption from its obligations to supply regulated fixed line services to Optus within Optus' HFC cable network footprint.
The ACCC is not satisfied that granting the 'Optus HFC exemption' would promote the long term interests of end users. The ACCC's final decision highlights two major concerns with the application:
the singling out of a particular competitor would represent a discriminatory access policy which would be likely to discourage investment and undermine the potential for efficient facilities-based competition in the telecommunications industry
Telstra's strong position in the pay TV market and control over content, through its interest in Foxtel, would be likely to limit any possible competitive benefits from granting the exemption.
ACCC Chairman, Mr Graeme Samuel, said the ACCC retains concerns that this exemption application focuses too much on one competitor, rather than on benefiting consumers and competition generally.
"The ACCC considers that open and equivalent access to all parties continues to be an important issue in communications regulation."
The ACCC also considered further submissions about content and the role of Foxtel in the pay TV market.
"The ACCC continues to consider that Telstra's interest in Foxtel, and Foxtel's control over content, provide a significant limit on competition in the pay TV market," Mr Samuel said. "This also limits the potential for Optus' HFC network to provide competitive constraint in other markets."
The ACCC's final decision to reject the 'Optus HFC exemption' application affirms a draft decision issued on 22 September 2008.
The ACCC's final decision on Telstra's 'Optus HFC exemption' application will be available on the ACCC website
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, or Mr Ed Willett, Commissioner, please call Mr Brent Rebecca, ACCC Media, on (02) 6243 1317. For general inquiries, please call the Infocentre: 1300 302 502.
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On 18 December 2007, Telstra lodged an application with the ACCC under section 152AT of the Trade Practices Act 1974 (the Act) seeking individual exemptions from the Standard Access Obligations (SAOs) for the 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.
The HFC (Hybrid Fibre Coaxial) network was initially constructed to supply pay TV services, but can also be used for other services including voice and broadband.
The ACCC released a draft decision proposing to reject the 'Optus HFC exemption' application on 22 September 2008.
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 standard access obligations (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.
Declared services
Under Part XIC of the Trade Practices Act 1974 (the Act), the ACCC may 'declare' services where it determines that this would be in the long-term interests of end-users (LTIE). Once a service is declared, carriage services providers (CSPs) are required to comply with standard access obligations (SAOs) in the supply of this service.
The ULLS is a service for access to unconditioned cable, usually a copper wire pair, between a telephone exchange and an end user's home or office. The ULLS essentially gives an access seeker the use of the copper pair without any dial tone or carriage service. This allows the access seeker to use its own equipment in an exchange to provide a range of services, including traditional voice services and high speed internet access, to the end-user.
The line-sharing service (LSS) allows similar functionality to a ULLS to a competitor, but where the voice service is still provided by another party.
The local carriage service (LCS) is a wholesale local call service that allows access seekers to resell local calls to end-users. The wholesale line rental (WLR) service involves the provision of a basic line rental service that allows an end-user to connect to the public switched telephony network.
The PSTN OA is a wholesale service that is used by access seekers to supply a range of voice-grade calls, including international, national long distance and fixed to mobile calls.
