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ACCC keeps eye on backhaul competition

Most backhaul network services provided by Telstra and other providers will still be regulated by the Australian Competition and Consumer Commission for at least the next five years.
Written by Josh Taylor, Contributor

The Australian Competition and Consumer Commission (ACCC) has decided to keep regulating domestic transmission capacity services (DTCS) for the next five years until March 2019.

In the decision, released late on Friday, the regulator said that the backhaul networks used for carrying traffic for fixed and mobile networks, would still be regulated in areas where there is not enough competition. The revised methodology decided by the ACCC states that there must be a minimum of at least three independent backhaul providers at a particular exchange for that exchange to be considered competitive.

If the exchange meets all the location and pricing criteria to be considered competitive, the ACCC will remove that exchange from the need for regulation.

"Competition for transmission services like the DTCS typically provides lower prices for this essential wholesale service. Retailers are then able to pass this on to consumers in the form of lower prices," ACCC Commissioner Cristina Cifuentes said in a statement.

"Those areas where a competitive environment has not developed require regulation to protect the interests of access seekers and ultimately consumers. However, in those transmission markets where a healthy level of competition exists or competition is likely to develop, the ACCC believes that it is appropriate to remove regulation."

When the ACCC applied its new methodology to the exchanges across Australia, it determined that all 88 exchanges in metropolitan locations that are already deregulated will remain deregulated, three of the 23 capital to regional backhaul routes will be reregulated, and 112 additional metro exchanges and eight regional routes will be deregulated.

In total, the ACCC said 200 metro exchanges, and 27 regional routes will be excluded from regulation.

The ACCC said the new determination will commence from January 1, 2015.

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