The Australian Competition and Consumer Commission (ACCC) has released a draft proposal to start regulating the termination of SMS messages for the first time.
It currently regulates the termination of calls on mobile phone networks. The ACCC has regulated this service since 1997 to ensure anyone can call a person on a mobile phone.
Mobile termination services allow mobile network operators to connect calls from rival mobile and fixed line networks.
For example, if a call is made from the Telstra network to someone on the Optus network, Telstra would need to pay Optus a termination charge. According to ACCC, the originating network will recover the costs of termination through its retail prices.
Mobile network operators control the delivery of SMS messages in the same way. However, SMS message termination is not regulated by the ACCC.
According to ACCC chairman Rod Sims, the wholesale charge for sending SMS messages between networks has remained unchanged for years.
“The ACCC is concerned that mobile network operators may be exercising monopoly power over access to their networks to keep wholesale SMS rates significantly above costs,” he said in a statement.
“Although some of the higher price retail plans offer unlimited SMS, the wholesale charge for SMS termination is passed on in other retail costs.
Our preliminary view is that regulating SMS termination will address the use of monopoly power and promote competition in the mobile sector. It should also result in lower costs to consumers.”
The ACCC is required to review its regulation of mobile terminating access service (MTAS) before June 2014. The last review was conducted in 2009.
The MTAS Declaration review has been released for public consultation and can be downloaded from the ACCC’s website.
Submissions can be made until 14 February 2013.
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Fixed line regulation
The ACCC has proposed that it continue regulation of wholesale services supplied over Telstra’s copper network, other fixed line infrastructure and transmission routes until 2019.
According to ACCC, these regulated transmission and fixed line services allow telecommunications service providers to use Telstra’s copper network, other fixed line infrastructure and transmission routes to provide a range of fixed line telephone and broadband services to Australian consumers.
Transmission is also used in carrying voice, data and video traffic.
The current Domestic Transmission Capacity Service (DTCS) expires in March 2014, while declarations for the six fixed line services expire in July 2014.
To ensure regulation is only applied where it is necessary to promote competition, the ACCC has proposed some adjustments to DTCS and fixed line services.
For DTCS, the ACCC wants to adopt a more comprehensive methodology for assessing competition on certain routes.
According to Rod Sims, this criteria has resulted in 112 metropolitan exchange service areas and eight regional routes being removed from regulation.
“Regulating these services has promoted competition over bottleneck infrastructure and contributed to lower prices and greater choice for Australian consumers,” he said.
The draft report on DTCS can be viewed on the ACCC’s website.
Turning to fixed line services, the ACCC is proposing changes to clarify that resale voice services provided over the NBN are not regulated.
“This recognises industry’s expectation that there will be sufficient competition in the wholesale market for these services when they are supplied using NBN infrastructure,” said Sims.
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