The ACCC has 'declared' the wholesale ADSL service under section 152AL of the Competition and Consumer Act 2010, arguing that this will promote the long-term interests of end-users of fixed-line broadband internet services throughout Australia.

 

Telstra currently retains dominant positions in the markets for both retail and wholesale fixed-line broadband services. Despite the deployment of competitive broadband infrastructure in some areas over the past decade, the ACCC states that competition in the supply of ADSL services is not effective.

 

Declaration will remove impediments to competitive internet service providers gaining access to Telstra's national ADSL network on efficient terms in order to supply retail services, including to around 11 per cent of premises where Telstra's network architecture has prevented competitors from using their own infrastructure.

 

The ACCC has also commenced an inquiry into the making of a final access determination for the wholesale ADSL service. This inquiry will consider (among other things):

  • the appropriate structure and level of pricing for the wholesale ADSL service
  • which terms of access should be addressed in the final access determination, and how these terms should be addressed
  • whether the final access determination should limit the application of the declaration to certain providers or to certain geographic regions.

 

Given that the final access determination inquiry is unlikely to conclude within 6 months, the ACCC was legislatively required to make an interim access determination for the service. The interim determination made today sets out terms and conditions of access for the next 12 months.

 

The interim access determination sets the following key price terms for the monthly per-user access charge and the monthly charge for data aggregation (which relates to data usage):

 

Interim prices for wholesale ADSL services

Monthly charge per end-user in Zone 1(predominantly CBD and metropolitan areas)

$25.40

Monthly charge per end-user in Zone 2/3(predominantly regional and rural areas)

$30.80

Monthly charge per Aggregating Virtual Circuit or Virtual LAN acquired in connection with wholesale ADSL

To 30 June 2012: $45.50 per Mbps

From 1 July 2012: $33.65 per Mbps

 

These prices will result in lower costs of supply for a majority of access seekers currently acquiring wholesale ADSL services from Telstra. The ACCC has adopted Telstra's current wholesale pricing construct for the interim access determination, and has set prices using a Retail Minus Retail Cost methodology. This calculates wholesale rates based on Telstra's retail prices minus the costs that it incurs in transforming network access into retail services.

 

"As a result of these decisions, end-users can expect to have access to a greater range of competitive fixed-line broadband internet service offerings," Acting Chairman Michael Schaper said.

 

The reasons for the ACCC's decision to declare the wholesale ADSL service, the interim access determination (and associated reasons), and the discussion paper regarding the making of a final access determination are available on the ACCC's website, www.accc.gov.au.

 

 Submissions are due by Friday 30 March 2012.