ACCC not ready to stop regulating ADSL just yet

Telstra retains overwhelming majority of wholesale ADSL market

Although the National Broadband Network rollout is gathering pace, the Australian Competition and Consumer Commission believes it should continue to regulate Telstra’s wholesale ADSL service.

The ACCC today issued a draft decision on that argues Telstra’s continuing dominant position in wholesale and retail ADSL means that the competition watchdog should continue to regulate the wholesale ADSL service for a further five years.

The ACCC declared the wholesale ADSL service in February 2012. The declaration is set to expire in February next year.

Declaring a service forces a network operator to open up its infrastructure to access seekers, with the ACCC setting ‘default’ price and non-price conditions for access.

The ACCC’s draft decision argues that “Telstra retains a dominant position in both the national wholesale and retail markets for high speed fixed-line broadband services”.

The watchdog’s draft view is that although there are areas in Australia where there appears to be infrastructure competition in the wholesale ADSL market, “infrastructure competition does not exist on a national basis and as a result there is limited competition at the retail level on a national basis.”

The ACCC document includes figures indicating Telstra retains almost 62 per cent of the wholesale ADSL market at a national level.

“Continuing regulation will ensure network providers continue to have access to Telstra’s copper network at reasonable prices,” ACCC commissioner Cristina Cifuentes said in a statement.

“This will encourage them to continue competing in the retail market to develop and offer different ADSL broadband products to meet the needs of customers as they prepare to shift to the NBN.”

Telstra and the ACCC are currently awaiting the outcome of a Federal Court case over the latter’s move 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 the seven services.

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Tags Australian Competition and Consumer Commission (ACCC)ADSLNational Broadband Network (NBN)national broadband networkTelecommunicationsTelstrabroadband

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