ACCC prepares for VoIP

Despite domination by Telstra, the ACCC will keep its regulation options open in preparation for changes to the local call services market with the increase in consumer use of VoIP services and broadband technology.

The commission has issued a draft decision to continue the regulation of local call services and to formalise its current approach on the regulation of line rentals. It has also set out a draft view on the future pricing of local call services and line rental service.

Telecommunications expert, Paul Budde said the current situation was not competitive with Telstra still dominating the local call services market.

“The ACCC is also aware of the changes that will come into play with the increase in usage of VoIP and broadband technology --the whole concept of local calls and access might change," he said.

"Although it will still continue to regulate the market it wants to regulations open so when it does start too change and there’s more competition, the ACCC will be able to facilitate processes.”

According to the ACCC-- with the exception of CBD areas, which will remain unregulated -- there’s no substitute for Telstra's local call service or line rental service and the prospect of more extensive roll-outs in the future is still uncertain.

The line rental service is currently examined in the context of local call pricing and the ACCC believes this is no longer a satisfactory or efficient way to regulate the line rental service.

However ACCC Chairman, Graeme Samuel said it will limit the period of declaration to two years from July 1.

“This will allow the ACCC to revisit its analysis of market conditions and reassess the extent to which alternative or substitute services to these local call and line rental services are evident, by 2008,” Samuel said.

Budde believes the ACCC's current regulations had no effect on Telstra’s dominance in the local call services market but the Telco giant will feel pressure from the growth in consumer adoption of VoIP and broadband services.

“Telstra used its monopoly to increase prices and the current pressure in the market to raise price of local calls even further," he said. "However it has to play a balancing act because if it misuses monopoly any further it will create a backlash from customers, who will have the option to go to VoIP, broadband or even change to a mobile network.”