Cases
Competition
Industry developments
Regulatory developments
On the 21 November 2007 the Australian Competition and Consumer Commission (ACCC) was notified of the following access disputes under Part XIC of the Trade Practices Act 1974 (Cth) involving:
- Telstra Corporation Limited (Telstra) and Hutchison 3G Australia Pty Ltd (Hutchison) relating to the price paid by Telstra to Hutchison for the Mobile Terminating Access Service (MTAS)
- Agile Pty Ltd (Agile) and Telstra concerning the monthly and connection prices paid by Agile to Telstra for the Unconditioned Local Loop Service (ULLS), and
- Soul Pattinson Telecommunications Pty Ltd and Telstra Corporations Limited relating to the monthly price paid by Soul to Telstra for the ULLS.
In addition, on 18 December 2007 the ACCC was notified of two access disputes involving:
- Telstra and Optus Mobile Pty Limited, and
- Telstra and Optus Networks Pty Limited.
Both access disputes concern the price paid by Telstra to each Optus entity for the MTAS.
The MTAS enables either fixed line or mobile phone consumers to call mobile users connected to another network. A price is paid for the MTAS by the carrier whose customer initiates the call to the carrier whose customer receives the call.
The ULLS allows use of an unconditioned cable between end users and a telephone exchange. This enables an access seeker to use the ULLS in conjunction with its own equipment to provide a range of services such as traditional voice services and high speed internet access to end users connected to that exchange.
The arbitration process for these access disputes has commenced. However, as the ACCC will be conducting the arbitrations in private, it will not make any public comment at this stage.
For further information please visit the ACCC website.
The ACCC has been notified of five telecommunications access disputes in relation to Telstra’s supply of the Line Sharing Service (LSS), Wholesale Line Rental (WLR) and Local Carriage Service (LCS).
The ACCC was notified separately of LSS access disputes involving Telstra by EFTel Limited on 18 December 2007, Wideband Networks Pty Ltd on 9 January 2008 and Primus Telecommunications Pty Ltd on 17 January 2008.
The LSS involves an access provider supplying a voiceband PSTN service to an end user, whilst also providing access to another carrier (the access seeker). This allows services to be simultaneously provided to the same end user over the high frequency portion of the unconditioned local loop.
On 20 December 2007, Digiplus Pty Ltd (Digiplus) notified the ACCC of a telecommunications access dispute concerning the price for the provision of WLR by Telstra to Digiplus. The WLR service enables access seekers to resell the basic line rental that allows an end user to connect to the traditional voice network, make and receive voice calls and have a telephone number.
In addition, on 24 January 2008, Telstra notified the ACCC of an access dispute with Digiplus in relation to its supply of LCS to Digiplus. The LCS is a service that allows access seekers to resell local calls to end users within a standard zone.
The ACCC has commenced arbitration for these access disputes. However, as the arbitration will be conducted in private, the ACCC is not making any public comment at this stage.
Further information is available on the ACCC website.
On 20 December 2007, the ACCC published final determinations for four access disputes involving the Mobile Terminating Access Service (MTAS).
The final determinations set the charges to be paid by Telstra and Optus to each other for the supply of the MTAS in 2007. The charges involve the price paid for carrying the portion of a call which terminates on Optus’ and Telstra’s mobile networks.
The determinations apply for the periods from 1 July 2004 to 30 June 2007, and from 1 July 2007 to 31 December 2008. Under the terms of the final determinations, the price for MTAS is 12 cents per minute during the period from 1 January 2007 to 30 June 2007, and nine cents per minute during the period from 1 July 2007 to 31 December 2007.
The determinations of the disputes have effect only between Telstra and Optus. Further information and the statement of reasons for the final determinations are available on the ACCC website.
On 12 December 2007, the Federal Court upheld the decision by the ACCC to accept a special access undertaking from Foxtel for its digital pay TV set top unit service.
Foxtel’s undertaking permits independent providers of digital content channels to offer their channels directly to Foxtel customers through Foxtel’s digital set top units. The special access undertaking provisions were added to Part XIC of the Trade Practices Act 1974 (Cth) to allow companies to achieve regulatory certainty as to the terms and conditions on which they must provide access on their new telecommunications infrastructure.
The undertaking was accepted by the ACCC in March 2007, however the Seven Network applied to the Federal Court to have the ACCC’s decision overturned. The Federal Court found that the ACCC had made no error in its decision and refused Seven’s application.
Further information on the Federal Court’s decision is available on the ACCC website.
On 12 December 2007, the Federal Court affirmed that the ACCC was not entitled to issue a Part A Competition Notice in December 2005, alleging that Telstra had acted anti-competitively by raising the wholesale price of its Home Access line rental service.
Justice Bennett found that Telstra was not afforded procedural fairness as the Competition Notice differed from the Consultation Notice in two substantial matters and Telstra was not informed of the details of these matters during consultation with the ACCC.
Further information on the Federal Court’s decision is available on the ACCC website.
On 18 January 2008, the ACCC issued its seventeenth imputation testing and non-price terms and conditions report under the enhanced accounting separation regime for Telstra.
The report presents data for the quarter ending 30 September 2007 and tests whether there is systematic discrimination in the price or non-price terms offered to Telstra retail and wholesale customers. The report uses imputation analysis to indicate whether there are sufficient margins to allow efficient firms to compete against Telstra in the retail market. Retail prices charged by Telstra are compared with the prices of the three core telecommunication access services, namely: the local carriage service, the PSTN originating and terminating access service, and the unconditioned local loop services (ULLS).
The analysis shows the following findings for the September quarter 2007:
- imputed margins across the bundle of services have remained relatively constant
- imputed margins have improved for services supplied over the ULLS
- the margins for services supplied for ULLS remain negative, except when used to supply a bundle of ADSL and voice services to business customers, and
- no material discrimination against wholesale customers occurred during the quarter.
To access the report please visit the ACCC website.
On 7 December 2007, the Minister for Broadband Communication and the Digital Economy, Senator Stephen Conroy announced that the Labor Government is committed to building a national high speed broadband fibre to the node network.
The new network will ensure that 98 per cent of Australians receive minimum broadband speeds 40 times faster than the current speeds. The remaining two per cent will receive a standard of service that is as close as possible to that of the new network and will be delivered by wireless, microwave and satellite technologies.
A transparent process will be conducted to determine who will build the network which is expected to be completed by the end of June 2008.
For further information please visit Senator Conroy's website.
On 18 December 2007, the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, announced that preliminary steps had been taken to ensure that switchover from analogue to digital television would be completed by the end of 2013.
Senator Conroy outlined that digital switchover is important because of the benefits of improved picture and sound quality and greater program choice. It also allows for alternate uses such as new mobile services, a fourth television licence and wireless broadband services.
Currently there is a digital take up rate of 30 per cent in Australia. To coordinate the necessary work to ensure total switchover by 2013, Senator Conroy has established a Digital Switchover Taskforce in the Department of Broadband, Communications and the Digital Economy which will be headed by Andy Townend.
Additionally, the date for digital only transmission in metropolitan markets has been amended from the previous government’s date of December 2008 to a commencement date in December 2009.
For further information please visit the Minister for Broadband, Communications and the Digital Economy's website.
On 18 January 2008, the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, announced that closure of the CDMA network would be postponed beyond 28 January 2008.
Senator Conroy announced that he was not in a position to declare equivalence between the Next G network and the CDMA networks. Telstra is to advise Senator Conroy by 28 April 2008 as to how they intend to address the issues and concerns that have been identified.
Senator Conroy’s decision has been influenced by a report written by the Australian Communications and Media Authority (ACMA) on the coverage of the two networks. The report identified that the Next G footprint is equivalent to the CDMA network and that the Next G coverage using an external aerial was equivalent. However, there were issues identified in respect of handheld coverage.
To ensure equivalent coverage and service to the CDMA network customers will need to use appropriate handsets and equipment. Telstra have been advised that they should ensure that customers are using appropriate Next G equipment, which may include replacing handsets to ensure equivalent coverage.
Telstra has also agreed to implement a retail accreditation program to ensure that a minimum standard of excellence is met by all retail staff in relation to advising customers appropriately about their needs.
Senator Conroy has also expressed concerns about the fact that many customers depend on the CDMA network to provide their home phones through CDMA Wireless Local Loop. Essential service providers, farmers and agricultural companies use CDMA telemetry systems for remote data communications. Senator Conroy has noted that many of these customers may have not had access to the necessary Next G equipment in time to migrate to the Next G network.
Telstra will issue a further report once these concerns have been addressed.
For further information please visit the Minister for Broadband, Communications and the Digital Economy’s website.
On 20 December 2007, the Australian Communications and Media Authority (ACMA) released research indicating that despite the high level of awareness and interest in Voice over Internet Protocol (VoIP) services among Australian consumers there is a relatively low take up level.
The findings were outlined in the report ‘The Australian VoIP Market’ which indicated that 81 percent of Internet households were aware of VoIP but only 15 per cent of respondents and 13 per cent of small and medium enterprises had used a VoIP service.
The report presents findings of research into the supply and demand of VoIP services in Australia. It estimates that there were approximately 269 VoIP providers in Australia in September 2007.
For further information and access to the report please visit the ACMA website.
On 29 January 2008 the Australian Communications and Media Authority (ACMA) released research showing that Australia’s small and medium enterprises (SMEs) and the rural sector are reasonably connected online and on the phone.
The research revealed that within the rural sector 74 per cent were online and 85 per cent had the use of a mobile phone. Amongst Australia’s SMEs, 92 per cent had internet connection and 93 per cent reported the use of a mobile phone.
ACMA reported that communications technology significantly transformed business practices and improved processes within both sectors. The research showed the following:
- 91 per cent of SMEs are connected to broadband
- 53 per cent of respondents in the farm sector are still dependent on dial up internet connection
- satellite connection accounts for approximately 50 per cent of respondents with broadband
- fixed line services are the main form of communication amongst both sectors
- 85 per cent of the farm sector has access to both a landline and mobile service
- 19 per cent of SMEs now identify their mobile phone as their main form of communication, and
- 13 per cent of SMEs are currently using Voice over Internet Protocol (VoIP) services.
Further information is available from the reports within the Telecommunications Today research program found on ACMA's website.
On 17 December 2007, the Australian Communications and Media Authority (ACMA) released the Media and Communications in Australian Families 2007 Report which showed that media and communications are well integrated within Australian families. Research revealed that most families had multiple media devices in the home, they value the internet and are striking a comfortable balance in their children’s use of media.
ACMA Chairman Chris Chapman stated ‘The study provides a sound empirical base for thinking about children and young people’s use of electronic media and communications and informing policy settings in regulating content across media platforms.’
The report highlights the following key findings about households with children aged 8–17:
- over 99 per cent have a television, with an average of 2.8 televisions per home
- 32 per cent have access to subscription TV
- 97 per cent have access to a DVD player, with an average of 1.7 per home
- 91 per cent have the internet, and 76 per cent have broadband compared to just 7 per cent with the internet in 1995
- almost all (98 per cent) have a computer, with an average of 1.8 computers per home
- 97 per cent have a mobile phone, with an average of 2.9 mobile phones per home
- more than half have a mobile phone with advanced features
- on average, children aged 8–17 spend about one and a quarter hours online every day
- electronic media and communication activities overall take up around half of children and young people’s aggregate discretionary time, and
- children themselves demonstrate a balanced attitude to the use of electronic media and communications. When given a preference young people prefer to do non-media activities and socialise with other people.
The Media and Communications in Australian Families 2007 Report is available on ACMA's website.
The Australian Communications and Media Authority (ACMA) has determined new rules to adopt a uniform approach to restrict access to MA15+ and R18+ content through mobile phones and the internet. The new rules arise from legislation passed in July 2007 and came into effect on 20 January 2008.
The new Restricted Access System Declaration requires that all content service providers check that individuals receiving restricted content are at least 15 years for MA15+ content and 18 years for R18+. Under the new rules ACMA may require the content service provider to either remove the content or place the content behind specified access restrictions after receiving a complaint and investigating internet or mobile content.
In addition, ACMA has made the following associated changes:
- content related provisions have been removed from existing rules about mobile premium services as these will be covered by the new legislation, and
- the Telecommunications Numbering Plan has been amended to ensure that requirements for the use of particular phone numbers to assist consumers in recognising age restricted content supplied by premium SMS and MMS continue to operate.
For further information about the new and amended legal instruments please visit the ACMA website.
On 20 December 2007, the ACCC issued a record keeping rule requiring 22 specified carriers to report on the locations of their core network and Customer Access Network infrastructure.
Reviews by the ACCC have highlighted the need for a consistent and coherent infrastructure database to further inform the effectiveness and timeliness of future regulatory processes.
Further, the ACCC has published Telstra’s latest exemption application which is the eighth exemption application in relation to fixed network services lodged by Telstra in the last six months. The application pertains to exemptions from its standard access obligations to supply a range of telecommunications services to Optus in areas in Sydney, Melbourne and Brisbane where Optus has deployed its HFC network.
The ACCC will conduct a consultation process in relation to Telstra’s current application and has issued a discussion paper to commence the process.
Further information on the discussion paper as well as Telstra’s application is available on the ACCC website.
More information
For information regarding possible implications for your business, contact a member of the Technology & Communications team.