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Competition watchdog to keep Telstra’s wholesale ADSL service in check

Competition watchdog to keep Telstra’s wholesale ADSL service in check

ACCC confirms it will continue to regulate the telco's wholesale ADSL service

The Australian competition watchdog will go ahead with its decision continue regulating Telstra’s wholesale asymmetric digital subscriber line (ADSL) service for an additional five years.

The move comes after the Australian Competition and Consumer Commission (ACCC) released a draft decision late last year indicating its intent to continue its oversight of Telstra’s wholesale ADSL service.

At the time, the ACCC argued that continued regulation of Telstra’s wholesale ADSL services would ensure network providers had access to Telstra’s copper network at “reasonable prices”, and would encourage healthy competition, despite the dominant position held by Australia’s largest telco in the local wholesale and retail ADSL market.

Now, the ACCC has said that it considers the move to declare the wholesale ADSL service on a national basis will promote the long-term interests of customers during the transition to the National Broadband Network (NBN).

Under the ACCC’s decision, the current wholesale ADSL final access determination will remain in place until it expires on 30 June 2019.

“Continued access to wholesale ADSL services remains in the transition to the NBN and is critical to enable retail providers to compete with the dominant provider, Telstra, in the supply of high speed broadband services nationally,” ACCC commissioner, Cristina Cifuentes, said in a statement.

“Declaring the ADSL service will lead to a more competitive retail sector which is likely to deliver greater choices for end users in the form of better prices, service quality and service options.”

“In making this decision, the ACCC considered submissions from industry and found a general consensus in favour of the ACCC approach,” she said.

During the consultation period for ACCC’s ongoing regulation of the ADSL services, Telstra rivals, Macquarie Telecom and Optus, made submissions suggesting that the contemporary market circumstances continued to warrant such oversight by the competition watchdog.

Telstra, however, proposed that 289 exchange service areas (ESAs) should be exempt from the declaration because they are competitive and, as such, the regulation should not extend to these areas.

Despite this, the ACCC maintained its draft view that Telstra is still the dominant provider in both the national wholesale and retail markets for high speed fixed-line broadband services, and that infrastructure competition on a national level remained limited.

“The ACCC also maintains the view that market share in the high speed fixed-line broadband market is likely to have flow on effects on the market for superfast broadband,” the Commission said in its final report.

The wholesale ADSL service was first declared in February 2012. Once a service is declared, a network owner must provide access to the service upon request. Where commercial agreement cannot be reached, regulated price and non-price terms determined by the ACCC apply.

The ACCC kicked off its public inquiry into its regulation of ADSL wholesale services in July last year, with ACCC commissioner, Roger Featherston, saying at the time that a number of changes had occurred since the wholesale ADSL service was first declared in 2012, including the NBN rollout.

"This inquiry will assist the ACCC in determining whether continued declaration of the wholesale ADSL service is in the long-term interests of end users,” he said at the time.


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