Australian Competition Tribunal orders in relation to WLR, LCS and PSTN OA service access exemption

On 24 August 2009 and 9 September 2009 the Tribunal handed down individual exemption orders for the WLR, LCS and PSTN OA services.

On 2 March 2011, the ACCC made IADs for the declared fixed line services. Under clause 5 of the IADs, the ACCC incorporated the effect of the Tribunal’s Orders. The IADs were backdated to commence from 1 January 2011 and were to expire on 31 December 2011.

On 20 July 2011, the ACCC made final access determinations for the declared fixed line services. The final access determinations incorporated the exemption provisions of the IADs, although the ACCC stated that further consultation would be undertaken regarding the exemptions. On 1 September 2011, the ACCC commenced a public inquiry into removing the exemptions provisions for WLR, LCS and PSTN OA from the final access determinations.

On 16 December 2011, the ACCC published a final decision to remove exemptions from the final access determinations.

During the period between the start of the IADs (1 January 2011) and start of the varied final access determinations (17 December 2011), where the exemption provisions for WLR, LCS and PSTN OA were removed, the ACCC determined which of the 380 Attachment A exchange service areas (ESAs) contained in the IADs and final access determinations satisfied the relevant criteria to become an Exemption ESA.

According to the IADs and final access determinations, an Exemption ESA means an Attachment A ESA with:

• three or more ULLS-based competitors;
• an Aggregate Market Share equal to or greater than 30%; and
• ULLS Spare Capacity equal to or greater than 40% of the aggregate number of WLR SIOs in that ESA.

The ACCC calculated the Exemption ESA List, on a six monthly basis, using information provided by Telstra and access seekers. In performing the exemption calculations, the ACCC collected ULLS Spare Capacity information from the ULLS-based competitors in each of the 380 Attachment A ESAs. As specified in the IADs, the ACCC “deemed” the spare capacity for those ULLS-based competitors who chose not to submit their ULLS Spare Capacity information to the ACCC.

The first round of exemption calculations, pursuant the Tribunal’s orders, identified 129 Exemption ESAs. The exemption of these Exemption ESA’s took effect from 30 December 2010. The second round of exemption calculations, pursuant to the IADs, identified a further 52 Exemption ESAs. As at 30 June 2011, 181 Exemption ESAs were exempt from WLR, LCS and PSTN OA services. A third round of exemption calculations was conducted and published. Pursuant to the unvaried final access determinations, an additional 34 ESAs were to become exempt as at 30 December 2011, however these did not come into effect.

The removal of the exemption provisions from the final access determinations, took effect on 17 December 2011. Due to the removal of these exemption provisions, the ACCC has undertaken no further exemption calculations and the exemptions have ceased to have effect. All of the relevant ESAs are now subject to regulation under the final access determinations for the WLR, LCS and PSTN OA services.