ACCC draft decision to open up Telstra's local network

14 December 1998
A draft Australian Competition and Consumer Commission decision issued today would require Telstra to allow its competitors direct access to the use of its customer access network, that is, the copper lines which link customers to local telephone exchanges. This would allow competitors to provide both local calls and high-speed data and other enhanced services to customers for the first time.

At present, competitors are restricted in where they can connect into Telstra’s network that unnecessarily increases their costs of providing services. With the proposed decision, the ACCC would enable competitors to connect into Telstra’s local network reducing their reliance on Telstra’s infrastructure and thereby minimising their access costs. As well, the ACCC would secure the rights of service providers to resupply local calls, that is, to sell to retail customers calls they buy in bulk from Telstra.

‘The ACCC decision should lead to lower prices for all calls, including local and long distance/international calls, which is of direct benefit to all consumers. It would also stimulate the introduction of high speed data services, fast Internet access and other interactive services which is of primary benefit to both business and a rapidly increasingly proportion of residential and small business users, which would be able to reduce their costs of participating in the information economy and increase their use of e-commerce,’ ACCC Chairman, Professor Allan Fels, and the Commissioner responsible for telecommunications, Mr Rod Shogren, said today.

To implement its final decision the ACCC would 'declare' certain services detailed in its explanatory statement. Declaration requires that any carrier or service provider supplying those services makes them available to all other carriers and service providers upon request. If the parties cannot agree on the terms and conditions of access, the ACCC can arbitrate.

‘The ACCC envisages the decision would speed up the pace of reform. Since deregulation, competition for local services has been slow to emerge and the main beneficiaries have been the larger business users. By giving competitors more direct access to the local distribution network and securing the provision of competitive local call services, consumers and small businesses in particular would have a greater array of services and competing providers to choose from and would no longer be limited to the services that Telstra chooses to supply.

‘The ACCC expects to see a greater range of innovative services delivered to end-users more quickly and at lower prices.

‘Competitors will need to invest in network facilities to be able to provide these new services, but they would be able to use the existing customer access lines instead of having to roll out their own cables all the way to the customer. Direct access to the network thus reduces the need for network duplication’.

To assist in the implementation of the ACCC’s decisions and to deal with a number of technical and operational issues associated with the supply of these services, a working group has been formed by the self-regulatory industry body, the Australian Communications Industry Forum (ACIF), to address these matters.

‘The ACCC believes the industry will need to work intensively and in a timely way to implement new inter-carrier and service provider arrangements through the ACIF process,’ Professor Fels said.

The ACCC has announced this draft decision as part of its public inquiry into competition for local telecommunications services, which began in March 1998.

The ACCC is today issuing a brief explanatory statement, which provides a summary of the key issues and includes descriptions of the services that are proposed to be declared.

The ACCC seeks feedback on the draft report from the telecommunications industry, end-users and the public more generally. The ACCC will be particularly interested in views about the likely impact of the proposals on the promotion of competition for telecommunications services.

Comments should reach the ACCC by 15 February 1999.

After consideration of these comments, the ACCC will move to finalise its decision.
Release number: 
MR 231/98
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