Friday, April 29, 2011

Australia - Complaints at the regulator's decision not to regulate prices on Telstra's copper network

[the australian] THE competition watchdog's failure to regulate pricing on Telstra's copper broadband network has been described as "shoddy".

Smaller telcos are warning that it presents an inconsistent approach to the NBN and could limit the growth of competitive internet services.

The Australian Competition & Consumer Commission's decision not to regulate pricing on Telstra's wholesale ADSL services has surprised many in the industry, who fear the incumbent telco will continue to charge higher prices to competing carriers for access.

Telstra's largest customer for ADSL services is iiNet, yet its chief technology officer, Greg Bader, said it did not get the best rates, especially in regional areas, where Telstra was the only provider.

iiNet places equipment such as DSLAMs (Digital Subscriber Line Access Multiplexer) in Telstra exchanges to sell broadband services to customers, but Mr Bader said the ADSL pricing regime meant there was little room left for profitable growth beyond the 400 DSLAM units it had already installed. "We've basically built everywhere that is economical to build and like everyone else we'd like to grow our layer-two broadband base in the lead up to the NBN, but in the regional areas Telstra gets a leg up by retailing below our wholesale cost," he said.

Last October, the ACCC sent shockwaves through the industry when it announced in an open letter that it would consider regulating wholesale ADSL.

But in a letter to Telstra -- published on the ACCC's website last week -- the regulator said it had now decided against an inquiry into the wholesale service.

The Competitive Carriers' Coalition slammed the ACCC's about-turn this week, saying that the regulator "did not know if it was coming or going".

The coalition's chairman, Matt Healy, said the decision was at odds with other ACCC determinations, which take into account the effect the government's NBN will have on the telecommunications sector.

"We are a bit bamboozled by the commission's stance on this. They've decided not to regulate this wholesale copper ADSL service in the regions, or even have an inquiry into it, because they want to see how the NBN unfolds before they decide if they need to regulate," he said.

"In one area of regulation they want to ignore the current state of the telecoms sector and the impact of the NBN, but then in another area they are saying they will take into account the changes NBN will bring on.

"It's shoddy regulatory work.

Telco anger as watchdog decides not to regulate wholesale pricing

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