The Australian Competition and Consumer Commission today announced that it will hold a public inquiry into whether or not a line sharing service should be declared or regulated under Part XIC of the Trade Practices Act 1974.
The inquiry follows requests made to the ACCC from the telecommunications industry to look into this matter.
Line sharing refers to a situation where two different carriers can provide separate services over a single copper pair (or 'line').
If such a service were declared, the carrier that provided a line into a consumer's premises would be required to allow another carrier to provide its its own service in combination with the first carriers.
"Line sharing enables alternative telecommunications carriers to provide voice and data services simultaneously over the same line, thereby enabling consumers to receive a wide variety of services from two different carriers without needing to install a second line into their premises", ACCC Chairman, Professor Allan Fels, said today. "For example, this would enable the provision of a voice service by one provider and a high-speed data service by another provider on a single line at the same time.
"Line sharing could potentially lead to lower prices for consumers of both voice and high-speed data, including broadband, services such as Internet access. Some industry operators have claimed, for example, that if more services can be provided over fewer lines, significant cost savings could be enjoyed by providers of telecommunications services." The public inquiry will be able to test these claims in detail".
The ACCC notes that Telstra has already indicated it is willing to provide a line sharing service to its competitors. Telstra has indicated, however, that the service won’t be commercially available until the second quarter of the 2002 calendar year and has not revealed other information, such as on what terms and conditions such a service will be offered to access seekers.
"A key consideration in this inquiry will be whether the ACCC needs to regulate the provision of this service. If Telstra were to make its line sharing service available to access seekers at reasonable terms and conditions during the course of this inquiry, the need for declaration is likely to be reduced.
"Before deciding to declare the service, the ACCC would need to be convinced that regulation of this service was likely to generate long-term sustainable benefits to consumers of telecommunications services that would not be achieved in the absence of regulation.
"Such benefits could include lower prices and a greater choice of new and innovative services.
"The extent to which declaration would improve competition and lead to efficient investment and use of telecommunications infrastructure will therefore be key factors in this consideration".
Both the US (since January 2000) and the European Commission (since January 2001) have mandated line sharing, although implementation remains the responsibility of member states.
The ACCC will issue a Discussion Paper soon that will identify issues about which the ACCC will want to hear the views of industry participants, consumer groups, and other members of the public during its inquiry.