By Gordon Peters

The competition watchdog the ACCC has released its final report outlining the findings of an inquiry into whether nine wholesale telecommunications services should continue to be regulated.

Access to telecommunications services in Australia is usually unregulated unless the services are declared, and in deciding whether to declare a service, the Australian Competition and Communications Commission (ACCC) must be satisfied that declaration would promote the long-term interests of Australians.

The nine declared services subject to the inquiry were:

• Domestic transmission capacity service
• Wholesale line rental
• Local carriage service
• Wholesale Asymmetric Digital Subscriber Line (ADSL) service
• Unconditioned local loop service
• Line sharing service
• Fixed originating access service
• Fixed terminating access service
• Domestic mobile terminating access service.

The ACCC examined how recent developments, including the completion of the NBN and declining use of Telstra’s copper network, have changed how telecommunications services are accessed – and it also looked at whether competition is protecting Australians who use these services.

The ACCC says it has decided it will allow the currently declared unconditioned local loop and line sharing services to expire on 30 June 2024.

“While these two legacy network access services once enabled greater competition on Telstra’s fixed line network, the number of consumers and businesses using them today is fast approaching zero due to migration to networks such as the NBN,” ACCC Commissioner Anna Brakey said.

The ACCC notes that its inquiry found that “other parts of Telstra’s fixed line network continue to show bottleneck and natural monopoly characteristics for voice and broadband services, particularly in regional and remote areas, as well as areas outside the NBN fixed line network.

“The ACCC has therefore decided that it will extend the declarations of wholesale line rental, the local carriage service and the wholesale ADSL service for a further five years, with no variations to the service descriptions.

“In the absence of alternative services that can compete as close substitutes to these fixed line services, we decided that extending their declarations was in the long-term interests of consumers. These services will promote competition outside the NBN fixed line network,” Commissioner Brakey said.

The ACCC has also decided that while it will extend the declaration of the domestic transmission capacity service for a further five years, it will remove regulation in geographic areas where competition is effective.

“Competition in regional and remote areas is often limited due to the significant initial investment needed to set up transmission capacity infrastructure,” Brakey said.

“Continuing to regulate transmission capacity infrastructure will not only promote competition in regional and remote areas but will likely lead to more efficient use of this infrastructure.”

The ACCC says it has decided that it will simplify the domestic transmission capacity service description, “so it more accurately reflects technology changes since the last declaration inquiry”.

The ACCC has also decided that it will extend the declaration of the fixed originating andterminating access services until 30 June 2029. These services support voice calls made to and from fixed line voice networks.

“As there are no close substitutes to fixed line voice services, declaring the fixed originating and terminating access services will promote competition by preventing fixed network operators from exercising market power in setting unreasonable terms of access,” Brakey said.

The ACCC says the service descriptions for the fixed originating and terminating access services will be varied to reflect industry developments since the last declaration inquiry.

“A further report on the ninth wholesale service reviewed, domestic mobile terminating access service, will be released separately. The ACCC anticipates publishing this report by June 2024,” the ACCC concluded.

By way of background, the ACCC notes that in May 2023, the ACCC commencea combined public inquiry into whether nine wholesale telecommunications services that support the provision of broadband, voice and data transmission services should continue to be regulated.

The declaration of the domestic transmission capacity service is due to expire on 31 March 2024, and the declarations for the remaining eight services are due to expire on 30 June 2024.

The ACCC is required to hold a public inquiry in the 18-month period before the expiry of a declaration under 152ALA(7)(a) of the Competition and Consumer Act 2010.

A full list of the service descriptions relevant to the inquiry are available on the ACCC website: s.152AQ declared services register.