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Inquiry into telco transmission commences

The ACCC has commenced a public inquiry to determine whether declaration of the Domestic Transmission Capacity Service (DTCS) remains appropriate in light of changes to the market, including the growth of commercial alternatives available to service providers, new NBN products for business customers and industry consolidation.

Transmission services are high capacity, wholesale data services. They are an essential input into many retail telecommunication services, including mobile services, residential broadband services and business services. They are also used to aggregate and transport large volumes of voice, data and video traffic. This is often referred to as backhaul.

The DTCS declaration is due to expire on 31 March 2019. The ACCC is required under the Competition and Consumer Act 2010 to conduct a review of the DTCS declaration within 18 months of the expiry of the declaration.

The ACCC notes many service providers are now acquiring non-regulated commercial domestic transmission services in preference to the regulated DTCS service.

“It is important to review the scope of our regulation to determine whether the way in which we describe the regulated service adequately reflects the manner in which transmission services are currently being sold and purchased,” ACCC Chairman Rod Sims said.

“If the market has changed to a significant extent, we will examine whether other service features should be included in the service description.”

Since the DTCS was last declared, the NBN has announced a number of new business enterprise products targeted to meet business customer needs. We also note that the introduction of 5G networks could offer an alternative technology over which high capacity short distance transmission services may be delivered.

“This declaration inquiry takes place at an important time for the communications market. The NBN rollout has progressed significantly since we last looked at the domestic transmission market and we need to examine the impact that NBN services are having on competition within the transmission market,” Mr Sims said.

“As part of this inquiry we will examine competition in transmission at NBN points of interconnection, as these transmission services are essential in carrying traffic between the POI and a service provider’s network.”

Given further industry consolidation since 2014, the ACCC will consider the extent to which this has impacted competition.

During the ACCC’s recent inquiry into whether domestic mobile roaming should be declared, the ACCC received a number of submissions about transmission costs and decisions to deploy or upgrade mobile networks in regional areas.

“As we indicated during that inquiry, we will consider whether transmission services used for the supply of mobile services in remote and regional Australia should be considered separately to other transmission services,” Mr Sims said.

The ACCC is seeking views on these issues via its discussion paper by 13 April 2018.

The discussion paper and further information about the DTCS Inquiry is available at:  Domestic Transmission Capacity Service Declaration Inquiry 2018 – 2019.