Communications Update June 2007
25 June 2007Contents
Cases
- ACCC releases interim determinations in telecommunication arbitrations involving Telstra
- Telecommunications access disputes
Regulatory Developments
- Do Not Call Register commences and ACMA revises telemarketing and research calls standard to remove prohibition on Sunday research calls
- The ACMA makes amendments to smartnumbers® allocation
- The ACMA finds all Australian content advertising quota is exceeded by all television networks in 2006
Competition
Industry developments
- ACMA publishes Media Diversity Report
- ACCC involved in decision between Telstra and G9 high-speed Broadband Network proposals
- Telstra closes 13 call centres around Australia
- ACMA to conduct additional audits on CDMA-Next G coverage
Cases
Back to topACCC releases interim determinations in telecommunication arbitrations involving Telstra
On 28 May 2007, the Australian Competition and Consumer Commission (ACCC) published interim determinations in two telecommunications arbitrations involving the supply of the Local Carriage Service (LCS) and Wholesale Line Rental Service (WLRS) from Telstra Corporation Ltd to Primus Telecommunications Pty Ltd.The LCS is a service for the carriage of telephone calls from customer equipment at an end-user’s premises to separately located customer equipment of an end user in the same standard zone. However the LCS excludes services where the supply of the LCS originates from an exchange located within a Central Business District area of Sydney, Melbourne, Brisbane, Adelaide or Perth and terminates within the standard zone, which encompasses the originating exchange.
The WLRS is an access service which allows an end-user to connect to a carrier or carriage service provider’s public switched telephone network. It provides the end user with a telephone number and the ability to make and receive any 3.1khz bandwidth calls.
The interim determinations provide that the charge payable by Primus to Telstra for the period to 31 December 2007 for the LCS is to be 17.92 cents per call, except where the parties agree otherwise. The charge payable for the WLRS is to be $23.12 per month for Home Line Part and $25.84 per month for Business Line Part. Interim determinations have been published with the aim of encouraging reasonable LCS and WLR prices across the market.
The ACCC will now progress to a final determination in this matter. According to the Trade Practices Act 1974, the arbitrations of these disputes will be conducted in private, so the ACCC is not making any public comment at this stage.
For further information please visit the ACCC website.
Telecommunications access disputes
On 5 June 2007 the ACCC was notified of two access disputes by Telstra Corporation under Part XIC of the Trade Practices Act 1974. The disputes involve the access providers Vodafone Network Pty Limited and Hutchinson 3G Australia Pty Limited.
The disputes are in respect of the price for the Domestic Mobile Terminating Access Service paid by the access seeker to the access providers. The Domestic Mobile Terminating Access Service is a wholesale input used by providers (either fixed line or mobile) that allows customers to call mobile phone users connected to another network. When a call is initiated the carrier of the customer making the call pays the carrier of the customer receiving the call for the mobile terminating access service.
The access disputes involve the charges and other terms and conditions, for carrying that portion of a call which terminates on the access provider’s network.
The arbitration process by the ACCC has commenced for these access disputes. The ACCC is not making any public comment at this stage as the Trade Practices Act 1974 requires that arbitrations must be conducted in private.
For more information on the access disputes please visit the ACCC website.
Regulatory developments
Do Not Call Register commences and ACMA revises telemarketing and research calls standard to remove prohibition on Sunday research calls
On 31 May 2007, the Do Not Call Register and the Telecommunications (Do Not Call Register)(Telemarketing and Research Calls) Industry Standard 2007 (Standard) commenced. Under the Do Not Call Register Act 2006 it will now be illegal to make telemarketing calls to any number that has been placed on the register.
The Standard was established by the ACMA to complement the Do Not Call Register and provides restrictions on hours of calling and requirements on terminating unsolicited telemarketing calls. It requires the person making the telemarketing or research call to disclose certain caller contact information and the source of the number and name of the person who the call was intended.
On 30 May 2007, the ACMA revised the Standard to permit research calls on Sundays. Under Schedule 1 of the revised standard, research calls cannot be made on Sunday before 9.00am or after 5.00pm, without prior consent.
The ACMA revised the standard to permit research calls on Sunday with regard to the following considerations:
- the public benefit derived from accurate and high-quality research, and
- the impact that prohibiting research calls on Sundays would have on the collection of accurate and high-quality research.
Telemarketing calls remain prohibited on Sundays under the Standard. Compliance with the Standard will be closely monitored and breaches may incur either a formal warning or financial penalty determined by the Federal Court. Penalties are up to $250,000 per contravention for bodies corporate and $50,000 for individuals.
For further information on the Do Not Call Register and Standard please visit the ACMA website.
The ACMA makes amendments to smartnumbers® allocation
On 21 May 2007, the ACMA announced that it had amended the arrangements for the allocation of free phone and local rate 13, 1300 and 1800 numbers through the smartnumbers® auction system.
The new provisions to the auction system are designed to:
- introduce a cooling off period that would allow applicants to withdraw nominations for numbers, and
- clarify the strategic link requirements for eligible charity applications for a number.
The ‘cooling off’ period allows clients to withdraw their nominations for a particular number online within 10 working days prior to the scheduled auction.
Charities wishing to purchase a particular number through the smartnumbers® auction are granted certain concessional arrangements, subject to the charity demonstrating a ‘strategic link’ between the number and the charity. One of the criteria is that the smartnumber® can form a word matching a word within a recognised registered trademark or registered business owned by the eligible charity.
The change to the charity auction system introduces the requirement that the name or trademark must either have been held for at least 12 months, or be in use or traded under.
For further information on the amendments to the smartnumbers® allocation process please visit the ACMA website.
The ACMA finds all Australian content advertising quota is exceeded by all television networks in 2006
On 12 June 2007, the ACMA announced that all commercial television networks had exceeded the requirement that Australian produced advertisements account for at least 80 per cent of advertising aired between 6.00am and midnight. Foreign produced commercials remained below the 20 per cent maximum permitted.
The findings are based on reports submitted to ACMA by three commercial networks. The results show that Australian content broadcasted by the Nine Network averaged 92 per cent, 90.4 per cent for the Seven Network and 87.3 per cent by Ten.
The quota is pursuant to the Australian Content in Advertising Standard (TPS 23) and aims to ensure that the majority of advertisements on television are Australian made.
For further information on the advertising content and annual compliance results please visit the ACMA website.
Competition
ACCC reports show telecommunications services more affordable for Australian consumers
On 13 June 2007, the ACCC released two reports on the competitive safeguards within the Australian telecommunications industry and changes in the prices paid by consumers for telecommunications services. The reports indicate that the competitive pressure between providers has resulted in better quality services and lower prices for consumers.
The ACCC report entitled Changes in the prices paid for telecommunications services in Australia 2005–06 states that the overall average real prices for telecommunications services fell by 6.5 per cent. From 2005 to 2006:- average real prices paid for fixed-line services fell by 6.6 per cent
- average real prices for mobile services declined by 6.5 per cent, and
- average line rental prices declined by 2.4 per cent.
There were significant investments by numerous competing carriers in both the 3G mobile networks and broadband enabling digital subscriber line access multiplexers (DSLAMs) installed in local telephone exchanges. According to the ACCC Chairman Mr Graeme Samuel, ‘growing investment in infrastructure is providing consumers with better quality services’.
The benefit of carriers investing in their own infrastructure was shown with the competitive advantage gained in broadband services through the early launch of ADSL2+ services offering higher transmission speeds.
However the report noted that competition for the delivery of services to end users remains fragile. As access seekers are reliant on Telstra’s ULLS and LSS services, any unforseen changes to price or access conditions may prevent their ability to access Telstra’s network
In addition, Telstra’s proposed upgrade to the fibre-to-the-node (FTTN) network poses risks to competitors. If it goes ahead, it may inhibit ongoing investments in competing DSLAMs and backhaul infrastructure for all carriers other than Telstra.
For further information on the ACCC reports please visit the ACCC website.
Industry developments
ACMA publishes Media Diversity Report
On 30 May 2007, the ACMA published its Media Diversity Report, which is designed to provide comprehensive information on media groups and operations throughout Australia.
The Media Diversity Report was developed as a ‘value add’ to the ACMA’s legislated obligation to produce a Register of Controlled Media Groups. The register was established in response to the Federal Government’s media reform package and contains entries for all registered media groups in each commercial radio licence area.
The report acts as an industry tool to indicate the level of diversity in the control of media operations in that licence area. It lists the registered media groups in each radio licence area and provides new information on the commercial media operations in licence areas. The report includes media operations in each licence area that are not part of a media group. It acts as a guide for community and industry to comply with new diversity rules set out in Part 5 of the Broadcasting Services Act 1992.
For further information on the Register of Controlled Media Groups and the Media Diversity Report please visit the ACMA website.
ACCC involved in decision between Telstra and G9 high-speed Broadband Network proposals
On 5 June 2007, Treasurer Peter Costello announced that the ACCC will be involved in the final decision over competing plans from Telstra Corporation and the Optus led-G9 consortium to provide a $5 billion high speed broadband network for all Australians.
According to Mr Costello the national broadband proposal, fibre-to-the-node (FTTN), will include no cost to taxpayers. FTTN is the fibre optic networks connecting consumers and businesses in capital cities. The Federal Cabinet has proposed setting up a panel of independent experts to review competing bids on the FTTN. A staff member from the ACCC will sit on the panel and their expertise will be integral in the approval process for any broadband network. The final decision will come down to the pricing models of both competitors.
The decision has been delayed by disputes between Telstra and the ACCC regarding the price Telstra will charge rivals for access to its proposed high-speed broadband network. Despite the desired $59 entry level pricing, Telstra has announced that it wants its average wholesale price to be about $85 per month and its highest price above $100 per month.
Telstra has promised to keep prices the same for 14 years, while the G9 consortium is only promising to maintain prices for three years.
For further information please visit The Australian website.
Telstra closes 13 call centres around Australia
On 5 June 2007, Telstra announced that it would close 13 call centres in Launceston, Newcastle, Wollongong and some capital cities. The announcement is pursuant to a plan by chief executive Sol Trujillo announced in November 2005 to cut between 10,000 and 12,000 positions in the company over three to five years.
The cuts, which are due to take place over the next 12 months, will come from the consolidation of the service faults and activation centres and some BigPond technical support call centres.
The remaining sites were selected because of available office space and appropriate skills. The Townsville and Perth centres will be used for technical customer service. The Melbourne and Sydney centres will be used for operations with no customer interaction, such as service activation.
According to Telstra, the consolidation will result in the loss of approximately 500 jobs, however the new centres will create about 1,200 jobs.
On 13 June 2007, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan announced that the Australian Government had met with Telstra to determine measures to minimise the impact of the planned closures. Tasmanian Senators and Coalition members plan to submit a proposal to Telstra to retain its call centre functions in Launceston with full support from the Minister.
Further information is available on The Australian website or Senator Coonan's website.
ACMA to conduct additional audits on CDMA–Next G coverage
On 13 June 2007, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan announced that the ACMA will conduct further audits of code division multiple access (CDMA) coverage in Western Australia, Tasmania, Northern Territory and North Queensland.
According to Senator Coonan, Telstra has promised that it will not switch off the CDMA network until coverage on the Next G network is equivalent or better. The additional audits will ensure that Telstra can meet its own public commitment.
In 2006, the ACMA conducted independent coverage audits of both the CDMA network and Next G over approximately 100 sites focusing on rural, regional and remote areas. The additional audits ensure that every state and the Northern Territory will be sampled in the coming months. They are essential in determining the quality of coverage and the sites take into account factors that have an impact on the transmission of mobile signals such as mixed terrain (including flat, mountainous and average terrain and river flats).
It is expected that the audits will be concluded in the near future after Telstra has confirmed that it has met its commitment to equivalent or better coverage.
For further information on the audits of the CDMA coverage, please visit Senator Coonan's website.
For more information please contact any one of our partners in our Communications, Media & Technology team.
