Optus takes issue with deregulation proposals

Australia's number two telco, Optus, has taken issue with elements of proposed deregulation of the telecommunications industry.

A range of deregulatory measures have been earmarked for the government's second 'repeal day' slated for September or October.

The Department of Communications last month issued a discussion paper on Telecommunications Deregulation Bill No.1 2014 that outlined proposed further telco deregulation, following the first tranche of measures introduced in March.

In a submission to the Department of Communications, Optus has objected to two of the seven proposed areas of deregulation.

Optus has indicated it objects to measures in the proposed bill that would remove a requirement under part 17 of the Telecommunications Act 1997 for telcos delivering standard (non-cellular) telephone services to allow customers to select different providers for long distance and international calls, and calls from fixed services to mobile phones.

"The deregulatory proposal is to limit this pre-selection obligation to services delivered over the legacy copper network, as it is no longer an essential requirement in a more competitive market," the Department of Communications' discussion paper states.

Although pre-selection "was an important competition measure when it was first introduced in the early 1990s, allowing consumers access to a range of service providers other than Telstra", it is "no longer important as a competition measure" the paper stated.

However, according to Optus pre-selection will remain important as long as Telstra is the only telco with national infrastructure to deliver fixed telephone services.

Optus said that although the National Broadband Network may appear to render pre-selection redundant "there is still a strong benefit to preselection in the business market in enabling the rapid transition of calls to a new provider".

Optus said that if a customer indicated to their telco they intended to transition to a different provider, the incumbent provider make hike up the prices during the transition period.

"[M]oving a large business networks to a new provider must be a staged process and price rises from the incumbent could be significant over the transition period and potentially acts as a deterrent to switching service providers," Optus argued.

"Having preselection would also make transitioning customers to the NBN considerably easier, as customers could potentially retain the same contractual conditions for preselected services through the NBN transition rather than having to recontract onto new products and rates."

The telco said that pre-selection should continue to apply to existing fixed telephone service types. "Limiting preselection to just the basic telephony pair cable service could exclude preselection on other common service types, such as ISDN, that are still important to business customers," the submission adds.

Telstra's pre-selection obligations should remain intact until the NBN rollout is completed. Optus also believes that pre-selection may be necessary for some parts of the NBN — if Optus' and Telstra's existing HFC networks are used as part of the NBN, as envisaged under the revamped rollout strategy, "the associated fixed telephony services may only be supplied via the switching facilities of the HFC provider (for example, Telstra or Optus)".

Unless there is a pre-selection obligation, telcos would be limited to reselling the services of the HFC network operator, Optus argued.

Local Presence Plan

Optus also indicated it objected to changing Clause 32 of Telstra's Carrier Licence Conditions. Clause 32 requires Telstra to report annually on its obligation to deliver services to regional areas.

"Whilst Telstra continues to receive funding from the industry in connection with the supply of Universal Services, Optus considers that Telstra should continue to have demonstrate its commitment to regional locations through the continued application of the Local Presence plan licence obligations," Optus' submission states.

Optus gave no indication of what everybody is no doubt dying to find out: How does it feel about ending regulation of telephone sex services under part 9A of the Telecommunications (Consumer Protection and Service Standards) Act?


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