Liberalization and Deregulation 2
Regulatory Framework
The
telecommunication industry operates within a regulatory framework with the
intent
that there is a large degree of self-regulation to enable
and promote competition. The
Australian Communications Industry Forum (ACIF) was established by the
industry to
develop voluntary codes and standards within this framework.
The Federal Government
exercises a degree of regulation via the following Government agencies:
Australian
Communications Authority (ACA)
The ACA has responsibility for regulating the telecommunications
industry including
internet and pay television services. This responsibility includes:
Licensing of carriers;
Administration of universal service obligations;
Management of the radio frequency spectrum;
Monitoring of compliance with technical standards for communication
equipment
and cabling;
Compliance with standards for electromagnetic radiation emission and
immunity;
Standardization for communication network integrity and interoperability.
Australian Competition and Consumer
Commission (ACCC)
The ACCC has
responsibility for administration of the following
telecommunication specific issues.
Ensuring competitive safeguards regarding conduct by carriers with
respect to
tariffs;
Determining whether access to carrier networks should be regulated; and
Determining the framework for Telstra’s retail price controls.
Technical regulation is in general determined by compliance with the
relevant standards
and codes, specifically the standards of the International
Telecommunications Union
(ITU).
In addition, the Minister can
also make regulations by implementing license conditions
on carriers.
Within
this framework of regulatory control of licenses and bandwidth, it is essential
that
transparency of costing allows access to carrier networks to
efficiently use existing and
planned
infrastructure.
Regulation
The telecommunications sector is dominated by Telstra, the former
Government owned
monopoly telecommunications company. Telstra's owns a large
proportion of
telecommunications infrastructure.
The major regulatory issue faced in the sector is the prices, terms and conditions of
access by telecommunications providers, to Telstra’s
infrastructure. The ACCC is in
charge of administering access and approving access prices,
with rights over review of
decisions available through the Australian Competition
Tribunal, and ultimately, the High
Court of
The access regime is designed to encourage competition in the industry,
without
duplicating infrastructure in an uneconomic way. A major
concern of infrastructure owners
is that if access prices are set too low, there is no
incentive for them to develop
infrastructure.
Network access pricing for incumbents has been embroiled in disputes
from the outset. It
has led to significant disputes on the terms of access to
the copper network, as well as on
the prices that the access provider has to charge the access
seeker to use the network.
The time taken because of this legal process to reach decisions has been
criticized as
benefiting no-one in the industry, with all stakeholders
facing regulatory uncertainty.
The Productivity Commission is currently investigating the
Telecommunications Access
Regime and competitive safeguards, while the Minister for
Telecommunications is also
currently showing great interest in reforming access rules,
possibly before the Productivity
Commission reports.
The digitization of Telstra's Hybrid Fiber Co-ax network
, commonly known as the Foxtel
cable network, is an example of how access regulation
impacts on telecommunications
industry investment in infrastructure. Telstra has deferred
its investment in the digitization
of the network at an estimated cost of over $1 billion,
because of uncertainty over the
terms and conditions that future access seekers will be
granted by regulators to the
upgraded network.
The unbundling of the local loop is another example of unacceptably slow
development.
Unbundling refers to technology and access to Telstra owned, local
switch-stations, in the
copper cable network, which allows third party
telecommunications providers to install
their own technology to service their customers with their
own equipment, rather than
being forced to pay for access to Telstra's infrastructure.
Non-public telecommunications systems infrastructure remains the
responsibility of both
State and Federal Governments. This has led to a
proliferation of standards and
inoperability between systems. In areas such as emergency
services, where coordination
is essential, often across State borders and between
agencies, this is a real problem.
The Government has also done much to assist rural access to
telecommunications.
The provision of services in regional and rural areas is generally
subsidized by the
Federal Government through community service obligations. Current
Government funding
is in the order of $670m (Time Running Out, May 2001).
Privatization
Dual rollout of network systems because of competition and lack of
network access by
various carriers has resulted in many cases to competitors
cables following parallel
routes. This has led to wastage of capital through lack of
proper protocols for sharing
network infrastructure between carriers.
Funding
The telecommunications industry is predominantly privately funded, with
the 50%
Government ownership of Telstra the major exception, which in any case
is a net
contributor to the public purse. However, private investment
has generally been directed
to the roll out of services of all types in major population
centers where there is a high
customer base and therefore a higher potential return.
The half-privatized nature of Telstra means that there is great
potential for direct
Government interference in the telecommunications industry, despite the
largely light
handed approach to regulation seen in telecommunications.
Streamlining Regulatory Arrangements
To ensure that competition in the telecommunications industry is
vigorous and fair, the
Government should look at streamlining the processes for making access
decisions to
telecommunications infrastructure. Timing issues should be
balanced against the need for
fair access pricing decisions that take account of the need
to provide a reasonable return
to investors in infrastructure, to ensure that significant
investment in infrastructure
continues.
Sharing of Infrastructure
The cooperation between carriers in the deployment and sharing of
infrastructure is
particularly relevant in non-urban areas where it may not be
economical to roll out several
mobile telephone networks.
The carriers have formed a Mobile Carrier Forum (MCF) with the primary
aim of
improving the co-location of mobile telephone facilities.
The MCF is developing a set of policies and
guidelines relating to:
A
national co-location framework;
Site documentation;
Antenna separation; and
Mast replacement.
Fibre Optical
Strategic co-operation could include arrangements to allocate
cores in fiber optic cable
routes to different carriers to provide diverse cable
routes. This would enable services to
be maintained if one route was damaged. The impact of lack
of diversity cable routes was
demonstrated recently when all of coastal NSW north of the
without services following damage to a single cable.