The Australian Competition and Consumer Commission has signalled it may need to step up its role in broadband telecommunications markets by making a draft decision to 'declare' the telecommunications service known as 'line sharing', or 'spectrum sharing'.
"This decision is another step forward in the development of broadband services in Australia", ACCC Chairman, Professor Allan Fels, said today.
"Line sharing should ultimately lead to more competitive and innovative broadband service offerings being made available to consumers at lower prices".
Line sharing allows one telecommunications carrier to provide broadband services while another provides voice services, on the same telephone line, at the same time.
"This lets consumers to choose one carrier to provide broadband and another to provide voice without needing to install a second line into their premises", Professor Fels said. "By enabling another carrier to provide voice services on the same line, line sharing also enables broadband providers to focus on providing high-speed data services to consumers, such as the Internet, video-on-demand, and other multi-media applications, without needing to take on the responsibility and cost of providing voice services".
To allow consumers to enjoy the benefits of line sharing, two service providers must be able to share one service provider's infrastructure. In particular, two carriers need to share the copper line over which such services are provided.
If followed through to a final decision, this means access to the broadband capacity of Telstra's copper network must be provided to competing carriers at reasonable prices on request. It also enables parties to seek ACCC arbitration of the terms and conditions of access if they are unable to reach agreement in commercial negotiations of their own.
"While the ACCC is convinced line sharing will provide significant benefits to consumers, the inquiry has focused on whether regulation of the terms and conditions Telstra sets for line sharing is needed", Professor Fels said.
"The ACCC notes that Telstra has indicated it is willing to provide line-sharing services to its competitors by early July this year. However, the ACCC has concerns that the terms and conditions set in its agreements are not consistent with those expected in more competitive markets for this service.
"The ACCC is also concerned about the long term durability of the agreements, given that Telstra faces no real competition in the supply of this service", Professor Fels. "This is particularly the case given market inquiries indicate commercial trials regarding this service seem to have stalled in recent weeks.
"The ACCC would prefer not to intervene, but if Telstra's prices for line-sharing are not low enough to allow new suppliers to enter the market and operate in fair competition, there may be no option other than to step in and ensure line sharing is provided on reasonable terms and conditions.
"The ACCC emphasises, however, that this decision is not final", Professor Fels said. "Were Telstra to promptly offer reasonable terms and conditions for access to its line sharing service that give its competitors some longer term certainty about their ability to continue competing for the provision of broadband services, the ACCC may be inclined to revise some of its key conclusions in its final decision.
"This decision is particularly important given the growing popularity of the Internet and other high quality data services delivered via telephone lines.
"The ACCC is concerned that competition in broadband markets is currently being inhibited because of the difficulty faced by new providers of high-speed data services entering the market.
"It is crucial that new technologies and services are not driven by monopoly control of the local network, since competition by a wide range of players provides a superior way of meeting the new telecommunications needs of consumers and businesses".
The ACCC has asked for submissions in response to its draft decision by 17 May 2002. The ACCC's draft decision and an earlier discussion paper are both available from the ACCC website.