Necessary, balanced and considered regulation of the telecommunications sector is crucial for its development, Australian Competition and Consumer Commission Commissioner, Mr Ed Willett, said today*.
"Ultimately, by promoting competition, the benefits of technological advancement can be realised and sustained over many years to come".
"Competition in broadband services since early 2004 has led to Australia recording one of the highest per-capita subscriber growth rates in 2005, increasing by six subscribers per 100 inhabitants, to a total penetration rate of almost fourteen subscribers per 100 inhabitants. This is just in excess of the current OECD average, ranking Australia 17th amongst OECD countries. Four countries now have penetration rates above 25 subscribers per 100 inhabitants.
"These developments have helped Australia overcome perceptions that it lags the world in adopting high-speed broadband services. While there has been growth in broadband services across all access technologies, access via the traditional copper loop remains the dominant technology, with almost eighty per cent of broadband services. This dominance is unlikely to change, at least for the short to medium term".
Mr Willett also noted:
- that the rapid uptake of broadband in recent years had been driven by lower prices rather than higher speeds and a larger range of services;
- that there are high speed services already on the market. Firms such as iiNet and Optus are already offering consumers ADSL services of around 20-24Mbps. These are being provided via access to the unconditioned local loop (ULL) service;
- that the potential expansion of broadband offers using ULL services has been the key driver of competition in broadband; and
- there is a wide degree of variability in the technical challenges associated with providing broadband services across different geographic locations, with different demographics, which substantially affected the economics of providing services.
"While much of the current debate has shifted towards the need for higher broadband speeds, there remains a great deal of scope for further growth in competitively priced broadband services.
"Furthermore, fibre is not the only available broadband technology, and it is far from clear whether it is the most appropriate technology across the broad range of areas in which Australians live and work. For example, wireless broadband such as WiMax, or emerging 3G technologies, might be suitable for areas where population density is low, but may be less suitable in metropolitan areas because of spectrum capacity constraints".
Mr Willett noted that there hade been a number of announcements of consortiums - including Optus, Macquarie and Soul - regarding the development of an open-access national FTTN network.
"As the competition regulator, the ACCC's door is always open to parties wishing to discuss such proposals and their likely regulatory consequences.
"But the ACCC must at all times be guided by its statutory criteria, and particularly the requirement that access decisions promote the long-term interests of end-users (LTIE). In forming judgements about the LTIE, though, it is important for the ACCC to consider not just the outcomes of the proposals put before it, but also how those outcomes compare to those that might arise if such proposals do not proceed - that is, the counterfactual. In particular, it is crucially important that we understand the potential for high speed services in Australia without the introduction of FTTN".
Mr Willett said the telecommunications regulatory regime introduced nine years ago has brought widespread benefits to consumers.
"Competition is a major driver of innovation, and we now find ourselves at a point where the industry can make significant advancements in the way that services are delivered.
"It is generally accepted that telecommunications is an industry of rapid technological change. With Telstra's plan to move to an all-IP network, competitors' investments in DSLAM infrastructure accessing the ULL, and the potential deployment of major wireless and/or FTTN networks, we are at a point I believe where change will be of a fundamental nature and will alter the way networks deliver key access services.
"When the industry is at such a turning point, and given that decisions taken today can have long-term implications, it is important to ensure that we protect the gains from competition achieved to date, and look to the gains that are yet to materialise. This will ensure that long term benefits to consumers will continue to grow.
"Effective and targeted regulation well applied will help ensure that competition remains the decisive driver for better and better broadband offerings: which means faster and faster speeds at lower and lower prices. Perhaps we don't 'regulate for greatness'; but good regulation creates the environment for greatness to emerge. Few great things have emerged from monopolies. Neither high speeds at high prices nor low speeds at low prices are what Australia needs for the future. Any FTTN proposal by Telstra, to be successful, must promise better offerings for consumers than the likely alternative.
"The ACCC will therefore continue to do its utmost to regulate only where necessary, in a balanced and considered way. Ultimately, by promoting competition, these benefits can be realised and sustained over many years to come".