ACCC denies Telstra request to limit Optus
Summary: Australia's competition regulator late yesterday denied an application by Telstra to stop supplying Optus fixed line services within the SingTel subsidiary's cable network footprint.
Australia's competition regulator late yesterday denied an application by Telstra to stop supplying Optus fixed line services within the SingTel subsidiary's cable network footprint.
(Credit: Telstra)
Telstra had applied for an exemption in December last year about its obligation to supply Optus with fixed line services in areas of Sydney, Melbourne and Brisbane where Optus has deployed its HFC network which provides voice, broadband and pay TV services to end users.
Telstra said at the time that if the exemption were granted it would encourage Optus to invest in its existing HFC network within its existing geographic footprint.
However, the Australian Competition and Consumer Commission (ACCC) said in a draft decision that creating such an exemption for one carrier alone would be a disincentive to infrastructure-based competition because it would lead to a telco having a "reasonable expectation that making investments in infrastructure will lead to it and it alone being denied access".
"The ACCC's concern is that that could lead to a significant chilling effect on investment generally," the ACCC decision said.
The regulator was also concerned about Telstra's Foxtel stake, which would mean competitive benefits would not be realised. "In particular, the high content costs faced by Optus are a significant barrier to expansion that limits Optus' ability to achieve potential economies of scope on its HFC network and to recover the costs of expanding or in-filling the network," the decision said.
Apart from those reasons, it seemed to be against the ACCC's notion of fair play. "The ACCC is concerned that this exemption application from Telstra focuses too much on one competitor, rather than benefiting consumers and competition generally," ACCC chairman Graeme Samuel said in a statement.
Telstra was, however, granted an exemption from its obligations to supply declared domestic transmission capacity service on some routes, because the ACCC no longer considered them to be a bottleneck due to alternate fibre networks.
LSS pricing determinations held up in court
Also yesterday, the ACCC celebrated the Federal Court upholding the legal
processes the regulator underwent to reach final determinations on access to
line sharing services used to supply wholesale broadband services.
Of 10 objections raised by Telstra on the legalities of the determinations, the court found that the ACCC had been correct in all but one case.
The line sharing service pricing disputes which sparked the legal proceedings had been brought to the Commission by Primus Telecommunications, Chime Communications (iiNet), and Request Broadband (AAPT) in December 2004, November 2005 and April 2006 respectively, with final determinations made in 2007.
However, despite the court publishing a decision yesterday, orders from the decision will not be made until October.
"This decision affirms the ACCC's approach to the arbitration of disputes between telecommunications providers," Samuel said.
Telstra was unable to reply to requests for comment in time for this publication.
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Talkback
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"True Competition"
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Optus' outage in Queensland, coupled with their ailing 3G network is a perfect example of the impact that Optus' minimal-investment, maximum-overselling strategy is having on the quality of service that it offers.
I refuse to purchase any telecommunications services from Optus, or any telecommunications service delivered using Optus carriage - the few services I do have fitting this description lay unused until my contracts expire.
I'll Tell You Why
Probably because Optus share exactly the same right to access it as Telstra do? The CAN is a declared asset afterall and just because Telstra own the right to manage and maintain it, it does not give them permission to decide who should have access.
Both Telstra's and Optus' HFC networks are incapable of providing business grade services due to their inability to offer guaranteed symmetric capacity which is what businesses demand. In addition to this providing HFC connections to multi-dwelling units is cost prohibitive. I believe you'll find in just about every other circumstance Optus use their HFC network in preference to the CAN whenever possible. I also believe you'll find Telstra have very similar business rules to Optus' in relation to connecting Businesses and MDU's using their HFC network for the same reasons.
Get That Up You
Deregulation
isn't this a non issue?
I know they only offer ADSL where they have their own hardware, and obviously cable where it's available.
Blind as a Bat Bell
What they are talking about is fixed line services a.k.a. PSTN lines. The issue here is not to deliver business grade services across a HFC network that passes homes but to deliver PSTN equivalence across a network that is already running past these properties and owned by that company.
It just goes to show that it really is cheaper to wholesale from Telstra then build your own infrastructure.
BTW ... How's it going at TTTT?
What else can we expect from Bell?
No I just do research
I suggest you go and actually have a look at Telstra's submission to the ACCC before trying to sound smart again. Optus' response is also a good read.
I'll even include a link to all relevant documentation for you since you obviously haven't bothered:
http://www.accc.gov.au/content/index.phtml/itemId/806382
@isnt this
@deregulation
@research
@i'll tell you
they invested but now find it too expensive to maintain and really just too much work in comparison to leaching off telstra, so they have changed their minds and now want out. this way of thinking and the accc ruling is not only stopping progress but *making us go backwards*. the last ruling made, the accc said that optus should still be allowed to use telstras, because telstras was superior. how sad for australia.
obviously james, you and the rest of the tttt promote no further investment or even a reversal of progress because no one will build when they can pocket the profits, not invest and just continue to use telstra's lines, declared or not. particularly when you consider the nbn is still years away. or if ever, if you and the tttt get your way.
if you cant see or wont recognise this decision is a not only *not progressing but regressing*, well you are simply a sorry and bitter individual.
but that's tttt progress for you. mission accomplished.
@get that up you
I'll Tell You Again
That's the whole point Tony; they do! Optus only use the CAN (i.e. the low tech copper wire from a customer's premises to the exchange) for Business customers and MDU's within their HFC footprint.
"they invested but now find it too expensive to maintain and really just too much work in comparison to leaching off telstra, so they have changed their minds and now want out."
They invested due to a compelling business case initially making the whole venture worthwhile. When Telstra decided to build their own HFC network overlapping the Optus network street for street it severely damaged this business case resulting in both companies writing down billions in their respective network's values. Nevertheless as previously stated Optus will use HFC whenever the option is available, but if the costs to connect a customer do not stack up such as in the case of an MDU then they will use the low-tech copper which is already connected to the customer's premises and pay Telstra a wholesale ULL rental fee to access it.
"this way of thinking and the accc ruling is not only stopping progress but *making us go backwards*. the last ruling made, the accc said that optus should still be allowed to use telstras, because telstras was superior. how sad for australia."
Wrong again. The High Court of Australia has determined that Optus, as with all other competitors are entitled to access to the CAN. This was also a condition placed on the sale of Telstra. The ACCC's determination has nothing to do with the network being "superior", but as previously stated HFC does not offer symmetrical capacity guarantees which is what many businesses require. In addition to this the costs of connecting cables to MDU's is prohibitively expensive, requires signed authorisation from the body corporate and just to recoup the connection costs would require the customer(s) to retain their service for an extended period of time. Given MDU's also have a higher proportion of renters they're obviously going to be less inclined to sign up for 24 month contracts, which is why using the CAN (which already has the necessary cabling into the premises) is more commercially viable.
"obviously james, you and the rest of the tttt promote no further investment or even a reversal of progress because no one will build when they can pocket the profits, not invest and just continue to use telstra's lines, declared or not."
My tip for you is to stop sourcing all of your information from the propaganda machine over at NWAT and do some research.
Tag teamed by Rhodes Scholars
"They only use the CAN for business customers or MDU's"
@tag
@james