ACCC keeps eye on network congestion management

A report from the ACCC has found traditional telco service provider revenue is being eroded by over-the-top providers

The Australian Competition and Consumer Commission (ACCC) has warned telco providers that it would not tolerate anti-competitive behaviour when it comes to service providers managing their network.

The ACCC issued the warning in the Telecommunications Reports 2011-12 (PDF), which was tabled in parliament on Tuesday.

The ACCC report stated network providers are using ‘network management practices’, such as prioritising time critical data like voice services over content from peer-to-peer programs.

“The same technical capability that allows network operators to prioritise different categories of traffic could potentially be used to disadvantage competing third-party services, such as over-the-top voice and messaging services, as has been observed overseas,” the report stated.

“The ACCC is alert to any emerging issues arising from potentially anti-competitive network management practices.”

The report also stated competition from over-the-top providers is eroding revenue at traditional service providers, with just a small number of companies recording growth.

ACCC chairman Rod Sims said telcos need to work out how to manage the congestion.

“Service providers will either need to invest in more capacity, adjust pricing or encourage their customers to shift their usage to less busy times in order to manage growing demands into the future,” he said in a statement.

Telstra is one telco to recently announce trials to develop strategies for combating congestion.

It recently announced two trials, including throttling speeds when customers use peer-to-peer networks and testing whether application-based speed-tiered plans could be introduced by the telco in the future.

However, the trial was met with staunch criticism from the industry and customers alike, with John Lindsay, CTO at iiNet, stating Telstra was only trying to avoid upgrading its ADSL network.

The ACCC report also said the increase in download volumes is being driven by consumers watching more online video content and devices such as smartphones and tablets allowing users to access the Internet more frequently.

It also revealed real prices for fixed-to-mobile calls fell by more than 10 per cent in 2011-12, with Sims attributing falls over the past five years to increased competition in the market and ACCC reductions in the regulated wholesale price for mobile call termination.

The report stated it is the first time more calls were made from mobiles than fixed landlines, but users still prefer fixed line connections for their Internet, with 94 per cent of downloads coming from fixed lines.

Complaints to the ACCC increased 7 per cent to 4350 complaints, 19 of which were major investigations into consumer protection issues in the telco industry.

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