ACCC issues final decision to deregulate intercapital telecommunications transmission

The Australian Competition and Consumer Commission today announced its final decision to remove the current access regulation on the intercapital transmission capacity service. This service is used for the transmission of voice, data and other communications between mainland capital cities.

The ACCC decided not to alter its conclusions from those outlined in its draft decision issued 19 March 2001.

"New investment is occurring and is planned on the intercapital routes such that the Commission considered access regulation on these routes was no longer likely to benefit telecommunications users"', ACCC Acting Chairman, Mr Rod Shogren, said today.

"This is a clear indication of the ACCC's willingness to remove regulation when it is no longer warranted.

"The ACCC recognises that there is some risk in winding back regulation before new entry occurs. However, the ACCC was also mindful that prices have fallen and the likely future benefits of the current regulation of intercapital routes were not clear, even in the time before new entry occurs", Mr Shogren said.

The ACCC will continue to monitor the intercapital transmission service, to observe how the market develops after removing the regulation.

Background

Part XIC of the Trade Practices Act 1974 establishes a process whereby providers of telecommunications services can obtain access to particular (input) services. There is no general right of access to such services. Rather, the ACCC must first declare (that is, decide to regulate) the service.

The ACCC can declare a service on the recommendation of industry or after the ACCC undertakes a public inquiry process and decides the declaration will promote the long-term interests of end-users of telecommunications services. The ACCC can revoke or vary a declaration where it is no longer satisfied that the existing declaration is in the long-term interests of end-users. In the present report, the ACCC has decided to vary the service description for the transmission capacity service.

In assessing whether declaration, revocation or variation to an existing declaration will promote the long-term interests of end-users, the ACCC must have regard to the objectives of:

• promoting competition in telecommunications markets

• achieving any-to-any connectivity (that is, ensuring end-users of different networks can communicate)

• encouraging the economically efficient use of, and investment in, infrastructure

Transmission capacity is a generic service that can be used for the carriage of voice, data or other communications using wide-band or broadband carriage. Carriage service providers can use transmission capacity to provide international and long-distance call services, mobile and data-related services, and IP-based services. Intercapital transmission refers to transmission between the mainland capital cities - Brisbane, Sydney, Canberra, Melbourne, Adelaide and Perth.

As a result of a public inquiry in 1998, the ACCC declared transmission capacity on all intercapital routes with the exception of the Sydney, Canberra and Melbourne routes.

Since declaration, the ACCC has been notified of only two disputes, both of which were withdrawn after the parties, AAPT and Telstra, and Primus and Telstra, reached commercial agreement.