The Australian Competition and Consumer Commission has recently investigated complaints that Telstra has engaged in anti-competitive conduct in relation to what it is claimed is inadequate provision of services connecting Telstra's PSTN (telephone) network with other telephone networks.
The ACCC has found that Telstra is responding to significant, unprecedented increases in interconnection forecasts from industry in November 1999 and later orders in January this year. These unusually large increases for interconnection capacity are mainly due to increases in dial-up ISP traffic, and from ISP traffic migrating from Primary Rate ISDN services onto the PSTN.
Notwithstanding Telstra's efforts to meet this unanticipated demand using its existing processes, the investigation into Telstra's supply of switchports (which enable interconnection with other networks) has demonstrated to the ACCC that there is a lack of transparency and clarity for wholesale customers in Telstra's forecasting, ordering and provisioning processes. This is particularly the case in instances where there is constrained capacity, and this raises serious competition concerns.
The ACCC has decided that it does not currently have a reason to suspect that Telstra has contravened, or is contravening, the competition rule in Part XIB of the Trade Practices Act 1974. However, the ACCC considers that the provision of switchports and other interconnection services to enable the supply of declared services and other wholesale services is one of the most fundamental planks of the access regime in Part XIC of the Act.
Wholesale customers need certainty around these processes to plan their businesses and deliver services to their customers, and to modify these plans should capacity difficulties arise. Telstra requires accuracy in forecasting to prevent inefficient investment in its network. Therefore, it is in the interests of the whole industry for Telstra to have an efficient and transparent forecasting ordering and provisioning process.
The ACCC considers that the current interconnection arrangements, grounded on bilateral contractual arrangements, may fail to meet the ongoing needs of both Telstra and access seekers, particularly where constrained capacity is likely to occur.
The ACCC has therefore requested that Telstra establish a transparent, consultative industry process to deal with forecasting, ordering and provisioning where there is likely to be constrained capacity. If this problem is not addressed, in conjunction with appropriate industry consultation and involvement, the ACCC will consider initiating regulatory measures.