The Australian Competition and Consumer Commission has decided to grant Telstra an exemption from its obligations to supply a "declared service" in parts of metropolitan Australia, subject to a number of conditions.
The service is the public switched telephone network originating access (PSTN OA) service. It is an input into wholesale voice services, but not broadband services – which are not subject to open access regulation.
The exemption, which covers 248 metropolitan exchange service areas, is not as broad as that requested by Telstra.
The exemption is consistent with the ACCC's recent decision to grant Telstra conditional exemptions in respect of the supply of two other inputs into wholesale voice services – wholesale line rental and the local carriage service.*
The rationale for granting the exemption is that access regulation should focus on those elements of the fixed-line network that continue to represent "enduring bottlenecks". Enduring bottlenecks generally refer to a network element or facility that exhibits natural monopoly characteristics and is "essential" to providing services to end-users in downstream markets.
The ACCC is of the view that wholesale voice services (including PSTN OA) no longer represent an "enduring bottleneck" in the areas subject to exemption. This is because access seekers are able to use their own DSLAM or MSAN facilities to provide voice services by making direct use of Telstra's unbundled copper through the declared Unconditioned Local Loop Service (ULLS).
The exemption is subject to a number of conditions dealing with impediments faced by some access seekers when seeking to use the ULLS. Specifically, these impediments include the capping of exchanges by Telstra, lengthy queues to enter into Telstra's exchange buildings and service disruptions when migrating from the line sharing service to the ULLS.
The ACCC has addressed submissions raised by access seekers that the Government's current National Broadband Network process is deterring investment in ULLS-based infrastructure due to concerns that this infrastructure could become stranded by a fibre rollout. The ACCC understands these concerns, but considers these exemption orders will not require access seekers to invest in significant amounts of new infrastructure. This is because, in the majority of areas covered by the exemption orders, a competitively-priced commercial offering of a re-sale voice service will likely be available.
An exemption was also granted in the CBD areas of Sydney, Melbourne, Brisbane, Adelaide and Perth - recognising the presence of alternative infrastructure in these areas capable of providing voice services.
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, or Mr Ed Willett, Commissioner, please call Ms Lin Enright, ACCC Media, on (02) 6243 1108
or 0414 613 520.
For general inquiries, please call the Infocentre: 1300 302 502.