Internode and iiNet have joined forces to call upon the competition watchdog to close a regulatory gap that they believe allows Telstra to extort retailers on its South Brisbane fibre network.
The call came in response to a discussion paper released by the Australian Competition and Consumer Commission (ACCC) last month regarding the definition of layer 2 bitstream services. The ACCC is seeking to make a declaration that would require that "last mile" fibre services that are not owned by NBN Co be subject to regulation via Standard Access Obligations, requiring them to provide open wholesale access like NBN does.
In a joint submission (PDF), Internode and iiNet said that as Telstra's South Brisbane Exchange was in the process of being dismantled to make way for a new hospital and the regulated copper was being replaced with an unregulated fibre network, it was important for this new network to fit into the ACCC's description of a layer 2 bitstream service.
"As a matter of principle, it should follow that if a copper-based regulated service is unilaterally withdrawn due to the deployment of an FTTP network, access seekers who were in receipt of that regulated copper service should be entitled to receive a regulated fibre service as a replacement for the regulated copper service," the companies stated.
The two telcos warned that Telstra had advised them that it didn't believe its fibre network in Brisbane would fall under the ACCC's layer 2 bitstream service definition, and said that if that was the case, then the ACCC should look at amending the description to include it.
In its submission (PDF) to the discussion, however, Telstra said the ACCC should hold off on declaring layer 2 bitstream services. The incumbent warned that NBN Co had yet to finalise its layer 2 service offerings, the finalisation of which would shine a light on NBN layer 2 services and provide clarity on what services will be deemed to be competing with the NBN services.
Telstra also argued that as it was very early on in the roll-out of the NBN, ensuring NBN-level wholesale access on other fibre networks was not an urgent issue at this time.
Ultimately, regulation of the South Brisbane fibre network may not be required, as NBN Co has hinted that it may purchase this network from Telstra as part of the $11 billion definitive agreement with the company.
In the meantime, both iiNet and Internode have reluctantly signed on to offer services on Telstra's South Brisbane fibre network.