Backhaul competition better but regulation still needed, ACCC finds

The Australian Competition and Consumer Commission is of a mind to continue to regulate the backhaul market in some parts of the country, but a draft decision released today by the ACCC would end regulation in 137 metro and 27 regional areas.

Earlier this year the ACCC launched an inquiry into whether continue its declaration of the Domestic Transmission Capacity Service (DTCS). Declaration is the process by which the ACCC can regulate access to a telco service.

“While the ACCC has removed regulation in areas that have been found to be competitive, it has maintained regulation of the DTCS where it is not satisfied that there is effective competition or where access to the DTCS is limited,” the draft report states.

The draft decision backs another five years of regulation.

“While some NBN business services are likely to be both a complement to, and competitor with, existing DTCS services the ACCC considers they are not yet fully effective substitutes or alternatives to current DTCS services,” the ACCC draft report states.

“The ACCC considers that this will likely change over the course of the next regulatory period while the NBN rollout is completed.”

“Extending our declaration for a further five years will allow time for the rollout of the National Broadband Network to be completed,” said ACCC commissioner Cristina Cifuentes.

The DTCS has been regulated since 1997, with the current declaration due to expire at the end of March 2019.

The market is dominated by Telstra, Optus, TPG and Vocus, with Telstra remaining “the dominant supplier of transmission services, particularly in regional areas,” the ACCC draft report states.

The ACCC said it intends to vary the DTCS service description to include a separate service category for mobile backhaul, in order to acknowledge “its unique supply and demand” particularly in regional and remote areas.

The ACCC will issue its final decision by 31 March 2019.

Earlier this year, the ACCC announced that Telstra, Optus and TPG had agreed to publish the criteria which that use to assess requests by other Internet service providers to enter peering arrangements.

Along with Verizon, in the past the three telcos have been dubbed the ‘gang of four’ and been accused of refusing to enter additional peering arrangements.

The ACCC said in October that it now expects large ISPs that “enter into bilateral peering arrangements with each other to also publish their peering criteria”.