Wholesale access to Telstra network still required – Tribunal

23 December 2008

The Australian Competition Tribunal has confirmed that there was an ongoing need for access to Telstra's network and that, in effect, the Australian Competition and Consumer Commission had proposed scaling back that regulation too soon.

The Tribunal rejected Telstra's applications for exemption from obligations to supply the wholesale line rental service and local carriage service in parts of metropolitan Australia. The Tribunal reviewed the decision made by the ACCC in August 2008, which was to grant more limited exemptions than those sought by Telstra.

The exemptions that the ACCC had granted were for exchange service areas (ESAs) where four or more Unconditioned Local Loop Service (ULLS)-based entrants had entered or where the ESA had 14,000 or more addressable services in operation. The ACCC also imposed a number of conditions dealing with impediments faced by some access seekers when seeking to use the ULLS.

The Tribunal stated that: "The problem is that… the fact of entry by one firm, or even by more than one firm, of itself does not establish that the incumbent is either presently restrained or is likely to be subject to the constraints of the competitive process in the future..."

ACCC Chairman, Mr Graeme Samuel said: "The ACCC recognises that this decision was a matter of judgement and understands that there are reasons why the Tribunal came to a different conclusion.  As with all court and Tribunal decisions, the ACCC will review those reasons and consider the implications for the ongoing performance of its regulatory functions."

In assessing the exemption applications, the ACCC considered that, in a limited number of metropolitan ESAs, and subject to a number of conditions and limitations, there were sufficient means by which competing telecommunications providers could supply voice services to consumers and that Telstra's provision of these wholesale services were no longer an enduring bottleneck.

The Tribunal, however, did not adopt the ACCC's reasoning. In relation to the question of timing of when to withdraw regulated access, the Tribunal said: "It would normally be easier to revisit a decision at a later stage and subsequently withdraw regulation, than it would be to re-regulate after the market had been divested of some or all of its regulatory constraints."

Media inquiries: Ms Lin Enright 02 6243 1108 or 0414 613 520
Infocentre: 1300 302 502

Release number: 
MR 373/08
ACCC Infocentre: 

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