ACCC extends deal with Telstra's copper network until 2019

The Australian competition watchdog will continue to allow retail telecommunication service providers to use Telstra's copper network for another five years.

The Australian Competition and Consumer Commission (ACCC) will continue to regulate wholesale services supplied using Telstra's copper network for another five years.

According to the watchdog, the six fixed line services , which are due to expire on 31 July 2014, will enable retail telecommunications service providers to continue to use Telstra's copper network and other fixed line infrastructure to provide a range of retail fixed line telephone and broadband services to Australian consumers.

ACCC chairman Rod Sims said in a statement that its decision to continue regulating the wholesale fixed line services until 2019 will support continuing competition.

"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," he 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 said to ensure the regulations are there to promote effective competition, it has decided to regulate voice services supplied in CBD areas where infrastructure-based competition has proven not to be sufficiently effective.

The ACCC has also clarified that resale voice services provided using the National Broadband Network (NBN) will not be regulated.

The announcement follows the watchdog's release of its final report (PDF) into the regulation of fixed line telecommunication services.

On 13 December 2013, when the ACCC released its draft report, after taking into account submissions and additional information on the declaration of the fixed line services, it had proposed Telstra would lose exemptions from regulation of its wholesale fixed line services in CBD locations.

The telco giant argued that there is sufficient competition in the sector and such low reliance on its wholesale services in the CBD to leave the exemptions in place without damaging competition.

The review has been ongoing since 11 July 2013 when the ACCC commenced a public inquiry into making new final access determinations (FADs) for the regulated fixed line services and the wholesale ADSL service.

The FAD inquiry will determine the terms and conditions, including price, for these services where commercial negotiations have not resulted in agreement between the parties.

The ACCC said that, due to the number and complexity of the pricing issues, it intends to undertake extensive consultation with industry during its inquiry.

Australia's third-largest internet service provider, iiNet, is one company that submitted a response (PDF) to the draft report where it argued that prices for accessing Telstra's copper network should take into account the fact that NBN Co will be paying Telstra for the copper network.

The ACCC is currently consulting on the arrangements for disclosing certain information on forecast expenditure and demand provided by Telstra for use in estimating prices in the FAD inquiry.

After finalising these arrangements, the ACCC will release a discussion paper around mid-2014. This will be followed by a draft FAD for further industry consultation.

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