ACCC extends fixed line regulation by five years

The ACCC has finalised its inquiry into the regulation of fixed line telecommunications services, deciding to continue regulating wholesale services supplied using Telstra’s copper network for another five years.

ACCC Chairman Rod Sims said the existing regulation of these services has benefited consumers.

“Regulating these services has promoted competition over bottleneck infrastructure. This has been fundamental to the development of competition in retail voice and broadband markets, which benefits Australian consumers,” ACCC Chairman Rod Sims said.

“For example, competition among retail broadband service providers has led to increased data allowances in recent years and a fall in the effective price per GB from approximately $30/GB in 2007 to less than $1/GB today.”

The ACCC will continue to regulate the six fixed line services until 2019.

The consumer watchdog has made some adjustments to the scope of regulation, clarifying that resale voice services offered over the NBN are not regulated.

But it has decided to regulate resale voice services supplied in CBD areas “where infrastructure-based competition has proven not to be sufficiently effective”.

The current declarations for the fixed line services expire on 31 July 2014.

Mid-last year the ACCC began an inquiry into making new final access determinations (FADs) for the regulated fixed line services and the wholesale ADSL service. This inquiry will determine the terms and conditions - including price - “for these services where commercial negotiations have not resulted in agreement between the parties”.

“Due to the number and complexity of the pricing issues, the ACCC intends to undertake extensive consultation with industry during its inquiry. The ACCC expects that this will take most of the coming financial year. The ACCC will not therefore be in a position to make the new FADs before the existing FADs expire on 30 June 2014,” the consumer watchdog said.

“The ACCC considers that, while it is conducting its inquiry, regulated prices should continue to be available for these services when commercial negotiations fail.”

The ACCC has also decided that the “competition benefits of regulating resale services in the CBD areas should flow through to consumers as soon as the new declarations take effect (from 1 August 2014).”

The watchdog has extended the current fixed line and wholesale ADSL FADs until the new FADs are completed, and has initiated an inquiry into varying the FADs.

The ACCC expects to completed this new inquiry in June 2014, and is seeking industry views.

More information is available at the ACCC website