Telstra have taken the correct way this time, and worked with the regulator to get regulations removed from a part of its network.
With Optus’s massive fixed network roll out, Telstra deem that there is enough competition in the areas that have Optus ADSL2+ and phone that the regulations about Wholesale rates should be dropped.
Now, part of me thinks this is fair. Sure, why not. Optus have infrastructure to compete beside Telstra, there’s no need to force Telstra to lower its prices when competitors can simply go to Optus for a better deal.
Telstra want to simply say, “We’ve helped create competition in this area, with cheaper, through regulations, ULL and LSS access, competition exists, Optus has 300 odd exchanges providing broadband and telephone services to consumers, it’s time we got a break from regulation of resale call regulation, and line rental regulation.”
That’s fair, right? The competitors can go to Optus, Telstra want to charge us this, what will you do it for? And then go back to Telstra, Optus said this, what will you do it for? Until either Optus or Telstra refuse to budge, making someone the winner of the deal.
In theory, that works well. It means they can fight for prices out with each other.
Unfortunately, in the real world, it’s not going to work as well.
Optus don’t have the full network that Telstra have. Optus don’t have the ports available, they don’t have the power to, at this present time, adequately service masses of customers.
So, Telstra still might lose out on this one, but for a reason that is not quiet spot on the mark. Optus could add more ports, and I am sure they would, but with Telstra at the exchange ownership point, and keys being lost for exchanges, a well known reason for deployment delays, its likely that Optus are at a disadvantage.
ULL and LSS are still obviously regulated.
It’s an interesting submission, part of me says, yes, sure, they can go for it, the other part says no, removing regulation could see a different marketplace.
It’s already in the media now, the big question is “Why remove regulation?”. Obviously, to put prices up, and negotiate individual deals with suppliers of services.
It’s not going to affect everyone nationally, it will affect a large number of people though, 5.1 million.
Maybe this move might encourage more competitors to get out there and invest in more infrastructure, and we have a more competitive framework?
iiNet planned an MSAN rollout a while back, maybe they might decide to flick the switch and move forward with that?
Primus is also running MSAN infrastructure in exchanges, as I understand it, perhaps not all, but some.
Optus have thought the roll out well, rolling out both ADSL2+ and phone infrastructure, but many cases in the Let’s Go PDF show that the problems are they are filling up quickly.
Could it be people cannot wait to get away from Telstra? Market forces might be trying to tell us something, and I think Telstra might be on the right mark with asking for regulation removal.
It’s fair, as long as it doesn’t force consumer prices up to a point where deregulation is pointless, and regulating the industry for a 2nd or 3rd additional competitor is the only workable solution.