Future scope of wholesale local call regulation in some cities

The Australian Competition and Consumer Commission today issued a second discussion paper on the future scope of wholesale local call regulation.

This follows an application from Telstra Corporation Limited for an exemption from its obligations to supply the wholesale local call service to its competitors in particular central business districts, metropolitan and regional centres.

The exemption application relates specifically to the supply of the wholesale local call service within the CBD areas of Canberra, Hobart and Darwin, the metropolitan areas of all capital cities and the regional centres of Newcastle, Wollongong and Geelong.

Telstra made an earlier application in relation to the central business district areas of Melbourne, Sydney, Brisbane, Adelaide and Perth. The ACCC issued a discussion paper on this application in August 2000 and is currently in the process of assessing this application.

The wholesale local call service is used by Telstra's competitors to re-supply local telephone calls to their customers. The service has been regulated by the ACCC since mid-1999 after an ACCC public inquiry.

"The paper identifies those issues which the ACCC considers to be relevant to its decision about whether to provide Telstra, and other telecommunications carriers, with an exemption from wholesale local call regulation in the areas nominated by Telstra", ACCC Chairman, Professor Allan Fels, said today.

"The ACCC has previously noted that it will consider winding back wholesale local call regulation if alternative means of supplying local calls become available and the market becomes more competitive. Whether these preconditions exist will be examined by the ACCC in its assessment processes".

The ACCC seeks submissions from interested parties in relation to those issues raised in the discussion paper by 11 April 2001.

Background

Part XIC of the Trade Practices Act 1974 establishes a regime for regulated access to telecommunication services.

Following the ACCC's decision to regulate a service under Part XIC, standard access obligations exist for any carrier or carriage service provider 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 standard access obligations 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.

The ACCC can also determine that each member of a specified class of carrier is exempt from any, or all, of the standard access obligations that apply to a regulated service. In deciding whether to make a determination 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.

In addition to the exemption powers, the ACCC can also vary the scope or remove entirely the regulation of a particular service. To do so, the ACCC must first hold a public inquiry, and then consider whether the variation, or removal of the regulation, would promote the long-term interests of end-users of carriage services, or services provided by means of carriage services.

Depending on the information received in the submissions, the ACCC expects to make its final decision in relation to whether an exemption from wholesale local call regulation is granted to Telstra and other carriers, in the specified areas, by the second half of the year. At that time the ACCC will also indicate its preliminary views, if any, about a future timetable for consideration of possible variations to wholesale local call regulation.