ACCC to continue regulating Telstra’s wholesale ADSL service

The Australian Competition and Consumer Commission will continue to regulate Telstra’s wholesale ADSL service for another five years, it announced today.

Late last year the ACCC issued a draft decision that argued Telstra’s continuing dominant position in wholesale and retail ADSL meant that the competition watchdog should continue to with regulation.

“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 issued today.

“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.”

Cifuentes said there was a “general consensus” from industry that regulation should continue.

The ACCC also knocked backed a Telstra push to have 289 exchange service areas (ESAs) exempt from regulation. The telco had argued that those areas were subject to competition.

The ACCC said in its report that its analysis showed Telstra “remains the largest single wholesale and retail fixed-line broadband provider at a national level and the dominant supplier of wholesale ADSL services in a number of the 289 ESAs where it has sought exemption”.

“The ACCC therefore considers it is appropriate to assess the state of competition on a national basis, rather than on an ‘ESA by ESA’ basis,” the ACCC’s report stated.

“This reflects that retail competition occurs on a national basis, particularly when [retail service providers] provide whole-of-business offerings.”

The report also states that Telstra has required access seekers to obtain buy backhaul from the telco when acquiring the wholesale ADSL service.

“The ACCC will monitor the supply of backhaul access products with the supply of the declared wholesale ADSL service in order to ensure the bundling of these services does not inhibit competitive outcomes,” the ACCC said.

The declaration will be in force until 13 February 2022.

Telstra and the ACCC are currently awaiting the outcome of a Federal Court case over the an ACCC decision to cut the regulated wholesale prices of a number of the telco’s fixed-line services, including ADSL.

The ACCC cut by 9.4 per cent the access prices Telstra can charge for seven services.

Copyright © 2017 IDG Communications, Inc.

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