Competition in telecommunications is beginning to bear fruit, but the Australian Competition and Consumer Commission remains concerned that threats to competition still exist, its Chairman, Mr Graeme Samuel, said today*.
"The intensity of the debate on ULL** pricing suggests that after seven years of regulation, competition is finally gaining some traction.
"In the past year we have at last seen some players commit to taking up the ULLS to provide broadband services using their own DSLAMs", he said.
"But in the past nine months or so, we have seen a strong response from Telstra, including a campaign against regulation, moves to increase ULL prices, and an on-again off-again fibre-to-the-node proposal".
Mr Samuel said these actions can have the effect of creating uncertainty on the part of Telstra's competitors, particularly those rolling out competing infrastructure including DSLAMs and wireless. The drop in some competitors' share price since late last year is an example of what this uncertainty can do.
Where markets are changing in this way, regulation needs to adapt to stay relevant, so it is timely to look forward and consider competitive interactions in an holistic way.
"With this in mind, the ACCC recently launched a broad-ranging review of regulation of fixed network services. Amongst other things, this review will consider the extent to which emerging competitive options – like wireless, HFC and fibre in particular – could break down the historical network bottlenecks.
"It will also consider how competition regulation can promote future network upgrades - such as fibre - allowing Telstra to compete vigorously, and allowing new entrants to compete vigorously in return".
Mr Samuel also noted that for broadband in rural areas, it is clear that ADSL is not the only game in town, with alternative networks (primarily wireless) in development and part operation now.
"Given that decisions taken today can have long-term implications, it is important to ensure that we protect the gains achieved to date, and look to the gains that are yet to materialise. In this way, long term benefits to consumers will continue to grow".