ACCC releases its draft decision on non-price terms and conditions and fixed line connection charges

25 March 2015

The Australian Competition and Consumer Commission has released its draft decision on non-price terms for regulated services. This draft decision also includes proposed connection charges for the fixed line services.

The ACCC’s draft decision sets out a targeted set of non-price terms which focus only upon those aspects of access where commercial agreements are less likely to ensue and where specific competition concerns are likely to arise. These non-price terms cover commercial and operational matters, such as billing and notification, general dispute resolution processes, and some ordering and provisioning processes for certain regulated services.

“The ACCC did not receive evidence of widespread competition concerns significant enough to warrant a more comprehensive approach to setting regulated non-price terms of access.” ACCC Commissioner Cristina Cifuentes said.

However, from its review of access agreements, the ACCC is concerned that some commercially negotiated access agreements may include clauses that could have the effect of entirely excluding the application of future regulated terms during the life of the agreement.

In this circumstance, access determinations would not in practice represent the regulatory fall-back envisaged by Part XIC of the CCA and would instead act as guidance to inform commercial negotiations and facilitate parties reaching terms of access by way of commercial agreement.

The ACCC considers that access agreements should provide the opportunity for access seekers to have recourse to new or varied regulatory terms on a timely basis so as to promote competitive outcomes and the long term interests of end-users.

“We are currently working constructively with an access provider to provide for terms that will give an opportunity to access seekers to seek regulated terms either at the end of a 2 year contract period or with 6 months’ notice, along with specific commitments to negotiate in good faith in relation to regulated terms” ACCC Commissioner Cristina Cifuentes said.

The ACCC will continue to monitor industry developments to see if regulated terms are being made available to access seekers and may consider further action if concerns remain.

The draft decision continues to set regulated charges for the connection of fixed line services. Connection charges are an unavoidable cost of providing voice and broadband services to end-users using Telstra’s copper network. Most of the draft connection charges are lower than current charges, reflecting efficiencies achieved by Telstra in the way that it manages external contractors undertaking connections work. The ACCC does not intend to extend the scope of its regulation of connection charges, as proposed by some submitters.

Consultation on this draft decision forms part of the ACCC’s inquiries into making access determinations that set regulated terms for the regulated services. These inquiries will determine regulated prices and non-price terms that will apply when access providers and access seekers cannot reach agreement through commercial negotiations.

The ACCC seeks submissions on its draft decision on non-price terms for the regulated services and connection charges for fixed line services by 17 April 2015.  More information on the consultation into non‑price terms and other charges, including information on how to lodge a submission, is available on the Non‑Price Terms and Conditions webpage.

Following consultation on this draft decision, the ACCC intends to publish final decisions on non-price terms for the regulated services and on connection charges (as part of the fixed line services final access determination on primary prices) in late June 2015.

The ACCC has already commenced consultation on the primary prices for the MTAS and DTCS and expects to release draft decisions on these services later this year.Further information on the regulated services is available on the fixed line services webpage, the DTCS webpage and the MTAS webpage.

Release number: 
Mr 42/15
Media enquiries: 
Media team - 1300 138 917

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