ACCC draft statement of deemed telecommunications services

[Robin Whittle]

Some initial thoughts as I was reading the first three chapters 
of the ACCC paper:

   Deeming of Telecommunications Services  2 June 1997

which can be found at:

   http://www.accc.gov.au/pubreg/pubreg.htm

These notes highlight matters which I consider interesting. Don't 
rely on these notes - read the document itself!  I have not looked in 
detail at chapters 4 and beyond.


This paper concerns a provisional list of services for which 
competitive access arrangements will apply to from 1 July.

Following 1 July, additional services may considered after 
recommendation by the Telecommunications Access Forum or by the ACCC
holding a public inquiry.

The arrangements are for services, rather than physical 
infrastructure.  The services may be those provided by a carrier to
itself as well as those provided to other carriers, service providers
and customers.

Access is extended not just to existing and new carriers, but to
service providers as well. (Beware the nuances of the term and
different types of service providers . . .)

Those services which are the subject of access arrangements between
carriers are, in general, on the current draft list.  I think that
this would be a major factor in Telstra and Optus so-far failing to
come to an arrangement about infrastructure sharing for their HFC
systems.  Pressure to do so is mounting, because of their imminent
need to impress investors.  Maybe things will suddenly get easier on
1 July once this initial list of declared services is frozen, and 
additional services could only be declared following either the 
TAF's suggestion or the ACCC public inquiry process.

The criteria for selecting services for competitive access 
arrangements apply to situations in which there is a natural 
monopoly for the service (or the infrastructure supporting the 
service).  They also apply where there is one or two (or more) 
"network elements" (eg. HFC systems) which represent bottlenecks where
it would be uneconomic to develop another one. 

The "service" includes various ancillary items, such as conditional
access devices (eg. set-top-units) and various other things like
maintenance, but the ACCC is unsure of how much depth of detail to
specify these things.

The criteria for deciding whether to declare services for competitive
access is essentially "Long Term Interests of End users" - LTIE. 
This is not a simple, short-term criteria.  For instance the ACCC 
recognises the possible negative consequences of discouraging 
investment in infrastructure and services in the first place.

    "Thus the likely effects on competition will need to be 
    compared with any potential disincentive to investment 
    arising from the costs of providing access to determine 
    whether or not access would promote the LTIE."

There is an interesting discussion of the "productive", 
"allocative" and "dynamic" components of economic efficiency.

The onus of proof is on the potential access provider to prove that
the service does *not* meet the criteria for being declared for
competitive access.



This is a draft document - the beginning of a process.  I think it
shows that the ACCC involvement in telecommunications is serious (we
already knew that) and knowledgable (as we were hoping).  There are
many other areas to tackle, and of course the industry will keep
inventing fresh ones.

Comments on this draft document need to be in writing, to the ACCC by
18 June.  Suggestions for further services to declare do not seem to
be constrained by this deadline.

I would nominate the following additional services, or areas into
which inquiry should be made:

1 - The bidirectional communicative functions of HFC networks (ie
    cable modems, telephony and in the future Video on Demand).
    HFC is the primary broadband Customer Access Network.

2 - ISDN services - both the overlay network (perhaps not since it
    is being phased out) and the OnRamp ISDN functionality of 
    Telstra's main phone network - or similar capabilities in 
    other customer access networks.

3 - Access to the twisted pair Customer Access Network, for POTS,
    ISDN and other types of signals/services, including ADSL.
    (A report by Harvey Morrison in the May 97 Data Communications
    Asia/Pacific tells how US regulations now provide for "Alternative
    Local Exchange Carriers" who march into the local exchange
    buildings of the incumbent carrier and connect their ADSL gear to
    the twisted pair lines going to customers.)

4 - Access to "dark fibre": fibre which is in the ground, but 
    not currently in use. 

- Robin

-  Robin Whittle  rw@firstpr.com.au  http://www.firstpr.com.au  -
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