ࡱ> HJG%` bjbjNN .0,,%       8$"((((((h\ a((aa  ((ad ( (a  ( 0!yEvp0b5&bb (>f,$((([X(((aaaad         Submission to the Fixed Services Review Declaration Inquiry for the ULLS, LSS, PSTN OA, LCS and WLR March 2009 Introduction The Competitive Carriers Coalition represents the interests of non dominant carriers in Australia. Its members participate in the residential, corporate and government markets. They provide fixed voice, data, Internet and mobile 3G services. Members of the CCC were among the pioneer investors in ADSL2+, VDSL and 3G services in Australia. In all of these cases, the investment and delivery of these services by CCC members preceded the entry of Telstra and Optus. Members of the CCC continue to utilize other regulated wholesale services to ensure they are able to participate in national markets and to support continued investment. Need for Continued Declarations and Timing Issues The CCC supports the preliminary view of the ԭ that the declarations under review should be extended. Revoking the declarations would not be in the long term interests of end users. On the contrary, revoking the declarations would, the CCC submits, be contrary to the long term interests of end users. Member companies of the CCC make extensive use of all of the declared services that are the subject of this review. The CCC strongly opposes past decisions by the Commission to extend exemptions for these services in some geographies on the grounds that this action by the Commission has been premature and risky. Competition is not sufficiently established that the businesses of the CCC members can be viewed as mature enough as to not be disrupted and financially disadvantaged by such exemptions. Recent actions by Optus to seek to wind back in markets where it is providing services to customers presently reliant on wholesale services is the most recent evidence of market immaturity and the unsustainable pricing of wholesale voice services even in locations where the range of wholesale services are still declared. The CCC and its members have provided extensive evidence to the Commission demonstrating the malaise in fixed line services in the context of the examination of these exemptions and through other process examining the state of communications markets. By extension, the CCC believes that it is crucial that the declarations are continued nationally for all the services under review. If these declarations were removed, it is quite clear that there would be an irreversible collapse of fixed line competition. The CCC understands the Commissions reasoning for extending the declarations for 12 months only while it awaits the decisions from the Commonwealth Government in relation to the National Broadband Network. However, the CCC believes that it is more important that the competitive industry is allowed to operate in an environment of certainty. The hostile attitude of Telstra toward competition generally and competitors specifically, especially competition utilizing wholesale services, combined with the premature moves by the Commission to exempt some wholesale services from regulation, have created an environment of great turmoil and uncertainty. The value of competitive investments and the confidence of the competitive industry has been greatly compromised by this uncertainty. A decision to extend the declarations for 12 months only would likely have the effect of creating unnecessary uncertainty into 2010. For example, if the Government does proceed with a proposal for legislative change out of the NBN process, it cannot be safely assumed that passage of such legislation will have successfully been negotiated through the Parliament without amendment, or even that it has been passed at all, in any given timeframe. However, under the process proposed in the discussion paper, the industry would be required to engage in a review of all of these declared services in 12 months, whether or not there were legislative changes in effect. It could also mean that legislative changes were not finalized at the time the review of declarations was commenced and amendments were made to these legislative changes in the middle of the review of declarations. The CCC suggests that the types of situations that could arise from the NBN process that were relevant to the present declarations would presumably fall into two broad categories. Either, they would make some or all present service declarations unnecessary or inadequate in some geographies, or there could be a need for completely new services to be defined and declared, or both. If any of these situations arose, the Commission has several options to allow it to act quickly to ensure regulatory arrangements keep pace with legislative developments. The Commission could at any time commence an inquiry into a variation of a service declaration, or into the declaration of a new service, or to make exemptions for some services in some locations. It could comfortably make these variations, exemptions or new declarations within a two year window. Alternatively, if the Commission becomes aware of legislative changes that would impact on any present declarations, it could advise the Government of this fact. It could then request that the Government include with its legislation new service declarations, or a requirement for the Commission to conduct the appropriate reviews to establish what new service declarations were required. It is therefore not the CCCs view that the potential for legislative change to have an impact on regulatory arrangements should not take precedence over the need for regulatory certainty Recommendation The CCC submits that the Commission should extend the declarations of the services under review for at least a two year period. This is a period more consistent with the contracts that carriers enter into for the supply of services to end user customers. The CCC submits that the Commission has sufficient legislative flexibility to be able to accommodate legislative changes using this timetable. 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