The Australian Competition and Consumer Commission today issued a draft decision proposing to grant Telstra exemptions from its obligations to supply two "declared" services in parts of metropolitan Australia.
The decision relates only to wholesale voice services, not broadband services - which are not subject to open access regulation.
The exemptions proposed by the ACCC are not as broad as that requested by Telstra. The proposed exemptions cover approximately four million of Telstra's copper lines – over half of Telstra's lines in metropolitan Australia.
The draft decision is subject to a number of conditions including a 12-month transition period and the on-going availability of the Unconditioned Local Loop Service.
The ACCC found that granting the exemptions would promote competition in the supply of voice services. This would occur through a combination of increased take-up of ULLS by access seekers and more efficient use of access seekers' existing ULLS-based infrastructure.
"Promoting ULLS-based supply of voice services will be in the long-term interests of end-users," ACCC Chairman, Mr Graeme Samuel, said today.
"Competitors using their own DSLAM facilities can more dynamically innovate their services than if they use pure resale of Telstra's services. This has already led to more dynamic and sustainable competition than pure resale models."
The ACCC also noted concerns that a fibre deployment would over time render DSLAM equipment, which depends on access to Telstra's copper at the exchange, obsolete. However, these concerns do not prevent efficient use of and investment in ULLS-based infrastructure in the near term. Transitioning to ULLS allows access seekers to build their reputation and customer base. Also, sufficiently certain migration arrangements would be required to prepare access seekers transitioning from ULLS to an alternative fibre-based service.
The ACCC's proposal, which is set out in its draft decision on Telstra's exemption applications, will be available on the ACCC website.
The ACCC is inviting interested parties to respond to the issues raised in the draft decision. The ACCC will consider submissions lodged with the ACCC by 27 May 2008.