Wednesday, October 14, 2009

ACCC View of Australian 2009 Telecommunications Reform Package

The ACCC representative was not available for the ATUG "Focus Forum on 2009 Telecommunications Reform Package". ACCC believes the best way to deliver broadband with a competitive market. The ACCC view is that competition in the fixed line voice services has not fully developed (particularly as compared to mobile services). In the case of mobile services the competitors have more control over delivery as they have their won networks (Telstra, Optus and Vodafone). In the case of fixed line, there is vertical integration in access and service, plus some horizontal integration with HFC ad subscription services. The ACCC sees these structural issues as hindering competition. Competition is "patchy" even in urban areas. Fixed line infrastructure includes DSLAM (540 exchanges), HFC networks (not expanding, limited access but improving service) and customer access network. As of June 2009, Tesltra was providing 70% of DSL services.

The ACCC's view is that the regulatory framework depends on market power and structural arrangements. The incumbent (Tesltra) is highly vertically and horizontally integrated. Current measures allow extent of integration to be reported but not change it. Reforms will address integration. Structural separation is required for vertical separation. Requiring Tesltra to divest HFC network might allow a new competitor. Divesting Foxtel could increase competition in media markets.

There are details of the ACCC's views in their "Submission to the Department of Broadband, Communications and the Digital Economy". The ACCC submission is nothing if not comprehensive, being 375 pages long (1.75 Mbytes). Unfortunately as with many such government reports it is poorly formatted and very hard to read.

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