Telstra gains reprieve from wholesale requirements

Dylan Bushell-Embling
11 Sep 2009

Australian regulator ACCC has granted Telstra a reprieve from some of its obligations to provide wholesale voice services.

The ACCC said it would wind back these requirements in metropolitan and CBD areas where the regulator finds that competition has sufficiently developed.

The regulator has committed to updating the map of exempted areas twice yearly, and said it would consider a number of factors, including the number of competitors in the area and their market share.

The exemptions will cover local carriage, wholesale line rental and PSTN originating access (OA) services.

In the first batch of exemptions, Telstra won’t be required to provide PSTN OA in five CBD areas. It is also not obliged to provide line rental or local carriage services in CBD areas.

The former state-owned operator was ordered to provide wholesale voice and internet access on its vast copper networks as a condition of its privatization, which began in 1997 and concluded in 2006.

But Telstra has long argued that competition has developed in some areas to such an extent that these obligations are unfair.

The request to be freed from some of its voice obligations was first lodged in 2007, but ACCC's review board - the Australian Competition Tribunal - rejected it. Telstra then appeared to an Australian court, which sent the case back to the tribunal for further consideration.

In its decision, the tribunal noted that “competition is likely to be promoted…if deregulation takes place in a market where … a small current player has taken market share from the large or dominant incumbent.”

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