The Australian Competition and Consumer Commission (ACCC) has concluded its inquiry into the regulation of transmission services and has released the final report for the Domestic Transmission Capacity Service (DTCS).
The ACCC has decided to extend the DTCS declaration for a further five years and to vary the service description, consistent with its draft report released on 5 December 2018.
The DTCS is a high capacity transmission service used to carry large volumes of data, video and other communications traffic. It is a key input into downstream communications services.
Transmission providers have continued to invest in infrastructure in response to the rapid increase in demand for data, the roll-out of the National Broadband Network and to service mobile networks. In many areas, there are now four or more transmission providers. However, competition in the market for transmission services remains less developed in outer metropolitan and regional areas.
Declaration creates an obligation on transmission service providers to offer access on regulated terms and pricing. In deciding which routes to regulate, the ACCC has a focus on the long term interests of end users, including whether declaration will promote competition.
The ACCC report found that changes to the industry since the last declaration inquiry in 2014 warrant a variation to the service description to reflect the way that transmission services are currently being acquired in the market. These include:
- A separate service classification for mobile backhaul to reflect the unique supply and demand characteristics of mobile backhaul, particularly in regional and remote areas.
- Distinct service categories for commonly acquired bandwidths.
- The addition of online ordering and fault monitoring as basic service features, bringing the regulated service in line with how most services are currently acquired commercially.
- Clarifying the definition of ‘point of interconnection’ to make it clear that access seekers can use a third party’s transmission network to access the DTCS.
In addition to these changes to the service description, the ACCC has reviewed the competition criteria to better reflect and account for changes in industry structure since the last declaration inquiry. Having assessed all routes and Exchange Service Areas (ESAs), the ACCC has found that an additional 137 metropolitan and 27 regional ESAs are sufficiently competitive and should be deregulated.
The DTCS declaration will be extended from 1 April 2019 to 31 March 2024. Changes to the DTCS service description will come into effect on 1 January 2020 to provide stakeholders with time to make any necessary adjustments to their commercial arrangements.
The ACCC will review the pricing of the DTCS in the next Final Access Determination, with a discussion paper to be released in May 2019.