ACCC to finalise domestic roaming decision in October despite Vodafone hearing

Vodafone's hearing against the ACCC's draft decision to declare wholesale domestic mobile roaming has kicked off in the Federal Court ahead of the regulator handing down its final decision next month.
Written by Corinne Reichert, Contributor

With the Australian Competition and Consumer Commission (ACCC) revealing that its final decision on whether to declare wholesale domestic mobile roaming due between mid and late October, Vodafone Hutchison Australia (VHA) is continuing to fight against the regulator's decision-making process in court.

During the Federal Court hearing on Wednesday in Sydney, Vodafone counsel Noel Hutley SC argued that the ACCC had "failed to conduct the inquiry lawfully", and that by publishing its draft decision not to declare wholesale mobile domestic roaming and threatening to publish its final decision, it is continuing to fail to act in accordance with the law.

VHA's arguments hinged on the allegation that the ACCC did not follow the correct legal process set out under Part 25 of the Telecommunications Act and Section 152AL(3) of the Competition and Consumer Act by not properly describing the service it was proposing to declare, and therefore not allowing VHA to make a meaningful submission.

"There must be the identification of a specified eligible service ... before [the inquiry] commences," Hutley argued, adding that the meaning of "eligible service" is too wide.

"One first has to define the particular thing."

VHA is looking for the ACCC's draft decision to be either quashed by a writ or treated as non-existent by a court order, although it added that the court could also find that the regulator is not conducting a declaration inquiry, meaning the ACCC would have to start the process again.

Despite these potential outcomes, the ACCC revealed that it still intends to publish its final decision within a month regardless of the court hearing, something that Justice Griffiths said the commission is asking him to shut his eyes to during his own deliberations.

Both the ACCC and Telstra -- which joined proceedings as the second respondent alongside Optus as an intervener during a case management hearing in late June, as they said they would be affected by the decision -- responded by saying that the legislation gives the ACCC the power to examine whether to make a declaration, but does not infer a direct obligation to make a declaration.

Lloyd, counsel for the ACCC, centred his arguments on the claim that while specificity is required by the legislation, the law says nothing about a definition needing to be set at the beginning of the inquiry process.

Rather, such a definition "can be developed" during the inquiry, and announced thereafter.

In response to these arguments of retrospectivity, VHA's Hutley questioned how the ACCC could form a decision about the service when they "haven't got the faintest idea what might be the declaration until the end of the inquiry process".

"It's a fundamental misunderstanding of the legislative regime," Hutley argued.

Archibald, counsel for Telstra, said general terms are commonly taken to be adequate specifications for declarations -- for instance, the ACCC's mobile terminating access service declaration -- and may be enough for a public inquiry.

There will be "permutations and subspecies within that species of service", but the general descriptor, in this case, "eligible service", is usually enough to go on, Archibald said.

Moreover, Archibald argued that the regulator would be "depriving the public" of the benefits of a public inquiry if exact specifications were demanded at the beginning of the process.

"VHA fails to establish any foundation for its contention of unlawfulness in what has occurred to date," Archibald argued.

For his own part, Griffiths J commented that Parliament's intention for organisations to make meaningful contributions to inquiries might not work if the subject of an inquiry is under such an evolutionary process.

VHA had launched judicial review proceedings over the ACCC's draft decision back in June, saying the process had failed consumers by being "too vague".

According to VHA, a service description for a domestic mobile roaming service should define the geographical and technological scope, including whether it is 3G, 4G, data, or voice only. Defining the service being declared is "fundamental to the process", VHA said.

The ACCC's draft decision prevents Vodafone, the telco with the least network coverage across rural and remote Australia, from piggybacking off Telstra's mobile infrastructure by taking the view that a declaration of wholesale mobile domestic roaming would result in less investment by Telstra in regional areas.

"Declaration of a roaming service would be likely to significantly reduce the benefits a mobile network operator would experience from extending its network coverage beyond that of its rivals," the ACCC's draft decision said.

Vodafone objected, saying not declaring mobile roaming would ensure that "too many will continue to be held prisoner to Telstra," a spokesperson told ZDNet at the time.

Incoming mobile network provider TPG, the Competitive Carriers Coalition (CCC) made up of Australia's non-dominant telcos, virtual mobile service provider MNF, and mobile network provider Pivotel also criticised the draft decision, saying it would lessen competition.

On the other hand, Telstra CEO Andy Penn said Telstra would "immediately" move to expand its 4G network to 99 percent of the Australian population should the ACCC confirm its draft decision.

Optus also welcomed the ACCC's decision after backing Telstra up during debate on the issue last year, with CEO Allen Lew telling ZDNet that Optus would similarly be investing AU$1.5 billion in improving its regional and metro mobile coverage as a result of the decision.

The Australian Communications Consumer Action Network (ACCAN), which represents the telecommunications needs of regional Australians, added that there is no evidence backing up Vodafone's claims that declaring roaming would increase competition.

The hearing will continue on Thursday, with the court to hear from Optus.

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