Allens

Technology, Media & Telecommunications

the full spectrum – 3 September 2002

Proposal to make more telecom market information available

Our telecommunications update service considers the ACCC's draft principles for public disclosure of telecom market information.

On 29 August this year, the ACCC released a draft report on the principles it will use to decide whether to publicly release telecom market information it collects under the record-keeping rules of the Trade Practices Act (TPA).

Since May 2001, Telstra, Optus, Vodafone, AAPT and Primus have been required to provide information to the ACCC in compliance with the Telecommunications Industry Regulatory Accounting Framework (RAF), which was formulated in accordance with the record-keeping rules.

The record-keeping rules allow the ACCC to disclose information provided under the RAF to the public if the disclosure:

  • promotes competition in markets for specified carriage services; or
  • facilitates the operation of Part XIB or Part XIC of the TPA.

However, the ACCC must have regard to the legitimate commercial interests of the relevant carrier or carriage service provider and any other matters the ACCC considers relevant. The ACCC must also comply with some procedural requirements of the TPA before making the disclosure.

The ACCC has released the following draft principles to govern disclosures of RAF information:

  • Public disclosure of RAF information is likely to promote competition by addressing information asymmetries in the telecom market.
  • Public disclosure of RAF information is likely to facilitate the operation of Part XIB and Part XIC by improving the quality and timeliness of ACCC decisions.
  • Public disclosure will be made only if the benefits to promoting competition or the operation of Parts XIB and XIC outweigh the costs in terms of the harm to a firm's legitimate commercial interests.
  • It is not a legitimate commercial interest that a firm's ability to earn above-normal commercial returns is reduced due to an improvement in competition in the market.
  • The ACCC will rely on the relevant firm to demonstrate harm to its legitimate commercial interests. Such harm may include effect on share prices, altering the prices a firm may charge, or altering the competitive behaviour of rivals.

Under the draft principles, the ACCC proposes to release market indicator data gathered under the RAF as soon as possible. It is expected that the information will be used by:

  • customers - to decide which services to purchase;
  • infrastructure developers - to make more informed decisions on deployment of telecom infrastructure; and
  • investment analysts.

The information released would relate to volume, revenue, growth and market share in various sectors of the retail and wholesale market. Areas of interest in the retail sector include the markets for local calls, long distance calls (domestic and international), mobile calls, ADSL (and xDSL) and ISDN. In the wholesale markets, among other areas, data would be released relating to PSTN interconnection, ULL services, GSM and CDMA interconnection and the local carriage service.

The ACCC has called for comment on its draft principles by 27 September this year.

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