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ACCC gives Telstra a break

The competition regulator yesterday announced a preliminary decision to exempt Telstra from having to supply rivals with wholesale telephone services in some metropolitan areas.
Written by Suzanne Tindal, Contributor

The competition regulator yesterday announced a preliminary decision to exempt Telstra from having to supply rivals with wholesale telephone services in some metropolitan areas.


Michael Cosgrave
ACCC GM Telecommunications

The Australian Competition and Consumer Commission (ACCC) had released a draft decision in April granting Telstra exemptions for 229 of the 387 exchange areas for which the company sought them. The regulator yesterday upped the number slightly to 248.

The exemptions held as long as the exchange service areas (ESA) had 14,000 or more customers to whom unconditioned local loop service (ULLS) could be provided and had three or more ULLS-based competitors.

ULLS refers to the process whereby Telstra allows rivals to use its copper network to sell their own services.

The exemptions were to come into effect 12 months after the date of the ACCC's final decision.

The ACCC received submissions from Telstra, Optus, AAPT, the Australian Telecommunications Users Group, the Competitive Carriers' Coalition, Chime, Adam Internet and Primus on the draft decision.

The in-principle decision delivered yesterday had taken the submissions into consideration and added conditions to those in the draft decision — that the exemption not apply to capped exchange areas where carriers could not gain access to exchanges to install their ADSL network hardware and also not apply to exchange areas where the loop became unavailable or obsolete.

The first additional condition the ACCC put forward was that the exemption should not apply to telcos waiting in a queue to install their own hardware in exchanges.

"The ACCC notes that queuing can be as much of an impediment to access to the ULLS as capping — in the sense that access seekers routinely are required to wait in a queue for months (or even years) in order to be able to enter into an exchange," the regulator said in a statement.

Whilst in such a queue, the telco cannot access the ULLS (unless they already have equipment in the exchange) and therefore the substitutability of the ULLS for existing wholesale telephone services is weakened.

However, the regulator inserted a proviso to stop access seekers exploiting the rule; inserting themselves in a queue to access an exchange in order to obtain wholesale services in the meantime. Telcos would only have one opportunity to install equipment in an exchange while having wholesale services available.

It also put forward a condition which responded to a situation where a carrier used wholesale services to supply voice and the line-sharing service to supply broadband. Once the wholesale telephone services became unregulated, carriers would move the voice service to ULLS, resulting in significant downtime.

"Where an access seeker is obtaining [wholesale services] in conjunction with LSS [line sharing service] to supply an end user with a bundled fixed voice and broadband service via that access seeker's DSLAM equipment, the exemption should not apply in relation to that access seeker's supply to that particular customer," the ACCC said.

"The current system means that there is a downtime for three weeks," ACCC GM telecommunications Michael Cosgrave told ZDNet.com.au. According to Cosgrave the main carrier this applied to was iiNet.

This condition would be removed if Telstra made the migration process robust — robust meaning downtime no greater than three hours and the end user having to take no involvement in the migration process if the access provider remains the same before and after the migration.

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