[accc] The Australian Competition and Consumer Commission today flagged a continuing review of whether geographic exemptions from regulation should be included in final access determinations (FADs) for the declared fixed line services.
In the April 2011 Discussion Paper into making FADs for fixed line services the ACCC noted that it would consider the future operation of the exemptions in respect of wholesale line rental, PSTN terminating access and the local carriage service. The ACCC's preliminary view was to incorporate the effect of the previous ordinary and class geographic exemptions made by the Australian Competition Tribunal and the ACCC for these services.
However, the ACCC is concerned that competitive pressures on Telstra in the exempt exchanges may not be living up to expectations at the time of the original exemption decision. The ACCC is also concerned that wholesale service offers in the exempt exchanges may be on substantially less favourable terms than those available in regulated exchanges.
Submissions have raised a wide range of issues, including the implications of the National Broadband Network on investment in, and deployment of, equipment to produce services subject to the geographic exemption and the creation of a competitive market for services such as wholesale line rental.
The ACCC considers the complex issues raised concerning the operation and impact of the exemptions on markets require further investigation. The ACCC will be seeking additional information on market impacts to assist in its consideration of the future of the exemptions.
At the same time, the ACCC is satisfied that it has largely resolved the issue of pricing for declared fixed line services and expects to make a decision within the next four weeks. To ensure price certainty, the ACCC will not delay its decision on this aspect of the FAD while other issues such as exemptions and non-price terms are under further consideration. The ACCC expects to resolve important non-price issues, including the future operation of exemptions, well before the new ESA exemptions take effect on 30 December 2011.
"The impact of the exemptions is significant - in practice, once the exemptions take effect, access seekers can no longer rely on regulated access to the services in these ESAs and must commercially agree the terms and conditions of access," ACCC chairman Graeme Samuel said.
"In considering this important issue, we need to gather some additional information on matters such as access seeker investment, alternative supply, and the impact of the NBN".
ACCC seeks further information on exemptions while proceeding to finalise fixed line pricing