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Unwired rages against Telstra’s PR machine

Unwired rages against Telstra’s PR machine

Telstra tries to cash in on Unwired's criticism of inconsistency in ACCC's regulatory pricing regime

Unwired is upset with Telstra

Unwired is upset with Telstra

ISP, Unwired, has rejected Telstra’s appropriation of comments the wireless broadband provider made in a submission to the ACCC regarding the watchdog’s telecommunications regulatory regime.

Unwired criticised the ACCC in several submissions for what it saw as inconsistent approaches to price regulation issues it claimed unfairly disadvantaged players looking to introduce alternative access technologies, like WiMAX.

Telstra responded to Unwired’s submissions by issuing a press release that claimed its push for an overhaul of Australia’s telecommunications regulatory regime had gained significant support from Unwired.

“Wireless broadband player Unwired used a submission to the ACCC to underline how the regime was negatively impacting on investment in alternative access technologies such as wireless broadband,” read the Telstra statement, adding that Telstra and Unwired “are saying the same thing” in relation to the regulatory regime.

Unwired’s manager for corporate and regulatory affairs, David Havyatt, responded with a post on Telstra’s ‘nowwearetalking’ blog, stating nothing much had changed since he used the line “many moons ago” that “Telstra is like a giant broken washing machine, the only cycle that works is spin”.

“Telstra has this overarching view that all regulation is evil and they have this pitch that regulation has been impeding investment. I was a little bit affronted because they didn’t quite represent the view we had taken,” Havyatt told ARN.

“I found it a little bit annoying that when you want to contribute to the regulatory debate, you have your words co-opted by Telstra for their increasingly fanciful version of regulation.”

Unwired had submitted a response to the ACCC in relation to the commission’s decisions on Telstra’s Undertakings provision of Unconditioned Local Loop (ULL), and the Draft Mobile Terminating Access Service (MTAS) Pricing Principles Determination, made in November 2008.

The submission referred to the recent decision by the ACCC to grant some exemptions to Telstra on the wholesale line rental (WLR) and local carriage service (LCS) services, a decision that has since been overturned by the Australian Competition Tribunal.

According to Havyatt, the company made three key points in its submission.

“The first was that the commission has got a fixation on the idea of competition being delivered by the use of Unbundled Local Loops, and seems to have developed a fixation for how it will drive down the prices of ULL,” he said,

Havyatt said underpricing the ULL service unfairly enabled ADSL operators to gain a competitive advantage over companies like Unwired, who is in the final stages of preparing to rollout its WiMAX services.

“The second piece was on a different paper from the ACCC where they decided not to further reduce the prices that mobile operators can charge for the MTAS service… they are arguing that there is no value in further reducing those because it seemed that all the benefits of reduction were being kept by Telstra, as the retail price of fixed-to-mobile calls had not declined,” he said.

“Not dropping the MTAS price allows mobile operators to earn monopoly rents from the calling industry and then subsidise their wireless data business out of those revenues.”

Unwired’s final argument criticised the ACCC’s view that Telstra is not facing sufficient competition in the fixed-to-mobile market to drive prices down.

“Yet when they made decisions about exemptions for the WLR and LCS they said they are facing competition, Havyatt said. "You can’t not regulate the MTAS market because of the lack of competition in fixed line, but then say we are going to give the exemptions to Telstra because there is competition in fixed line.”

Unwired would like to see more consistency in the ACCC’s approach to decision making.

“What does it say about how effective the regime has been if after 11 years of competition the only people earning rent is Telstra? We’d like a much more rigorous, consistent approach in their decisions making, some recognition that nothing has really done much yet to dent Telstra’s market power.”

Unwired is currently in the final phases of choosing a vendor and deployment schedule for its WiMAX network, which it will push as a 4G network.


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