It is unlikely anyone was surprised, when the Australian Competition and Consumer Commission (ACCC) released the final report for its mobile roaming declaration inquiry on 23 October 2017, that it determined not to declare any mobile roaming services. The ACCC did however find that a number of steps could be taken to improve mobile services in regional areas, releasing a paper outlining its recommendations.

Background to the roaming inquiry

The ACCC announced that it would consider declaring mobile roaming services under Part XIC of the Competition and Consumer Act 2010 (Cth) (CCA) in October 2016. A declaration would have been likely to have the effect of requiring Telstra, as the network operator with the largest geographical reach, to provide roaming services over its network to competing mobile network operators (currently Optus and Vodafone, but soon to include TPG Telecommunications).

Under Part XIC of the CCA, the ACCC is required to hold an inquiry before declaring a telecommunications service. The ACCC invited submissions from stakeholders on its issues paper and, following consultation, issued a draft decision in May 2017 (for a discussion of the draft decision see here). In short, the ACCC’s draft decision provided that it would not make a declaration on the basis that the ACCC believed it would be unlikely to improve competition in regional areas, either on price or service quality and coverage.

Final decision on declaration

The final decision of the ACCC confirms its draft decision. In the ACCC media release announcing its determination not to declare any mobile roaming services, the ACCC noted that a declaration could in fact harm the interests of consumers by having a dampening impact on infrastructure investment in regional areas.

This may not be entirely the last word on this issue. There are proceedings underway in the Federal Court in which Vodafone is challenging the ACCC’s processes in undertaking the inquiry. The hearing in that case occurred in late September 2017 and judgement has been reserved. It is possible, if Vodafone’s challenge is successful, that the ACCC would undertake a new inquiry. It should also be remembered that the ACCC has undertaken 2 inquiries into declaring mobile roaming services in the past, the first in 1998 and the second in 2005. Therefore it would be expected that the ACCC will reconsider this issue again within 10 years, if history is any guide. If TPG Telecommunications, the newest mobile network operator, has difficulties in entering into roaming arrangements with other operators, this may encourage the ACCC to re-look at this issue at an earlier point in time.

Regional mobile issues paper

Although the ACCC has decided not to declare any mobile roaming services, it has acknowledged that many concerns have been expressed regarding inadequate mobile phone coverage and poor quality service in regional Australia. The issues paper released by the ACCC at the same time as the final mobile roaming declaration decision states that a number of policy and regulatory measures could be implemented to assist in remedying these issues.

The ACCC recommended:

  • Transparency is improved by encouraging industry to provide more transparent and consistent information regarding their networks and services, governments making more data on mobile networks publicly available and the ACCC adjusting its record keeping rules to require more information to be provided by mobile network operators on the investments in their networks. Increased transparency will allow consumers to make informed decisions on the services to purchase
  • Cost reductions for mobile network operators are achieved by requesting governments to consider competition issues when designing mobile infrastructure subsidy programs (such as the current Commonwealth Mobile Black Spot Program), the ACCC reviewing its Facilities Access Code (which establishes a regime for carriers to install their equipment on telecommunications facilities owned by other carriers) and encouraging the use of the National Broadband Network (NBN) by mobile network operators to extend their network footprints
  • A competition focus for spectrum regulation could be achieved by making further amendments to the proposed new radiocommunications legislation that the Government is planning to introduce within the next 12 months.

There has been limited stakeholder response to the ACCC’s issues paper, with most comments focussing on the ACCC’s declaration decision. Opinion on the declaration decision reflected that expressed in relation to the draft ACCC decision issued in May 2017.

The ACCC will progress quickly with its proposals to review the Facilities Access Code and its infrastructure record keeping rules. In this regard, the ACCC released its consultation paper for amending the infrastructure record keeping rules on 25 October 2017. Comments are sought by 17 November, indicating that the ACCC wishes to put changes in place quickly. Many of the other recommendations of the ACCC in its issues paper will require support of other sector participants for implementation and progress in those other areas may be slower.

How does the issues paper link to the ACCC’s communications sector market inquiry?

The ACCC commenced a communications market study in late 2016, with the release of an issues paper on 5 September 2016. The aim of that study is to look at developments in the Australian communications sector, identify market failures and consider options to address those market failures to protect the interests of consumers. There has been a great deal of interest in the study. The ACCC received over 60 submissions and held a well attended stakeholder forum over 2 days in early July 2017. The draft report was released on 30 October 2017.

The ACCC has stated that many of the measures that it has suggested in its regional mobile issues paper were identified through the consultation undertaken for the communications market study. Unsurprisingly, given the concerns expressed by both consumers and retailers regarding the NBN, the draft report for the market study focusses largely on the fixed line market rather than mobile services. The Government will need to consider both the ACCC’s communications market study and the recommendations from the regional mobile issues paper and determine what, if any, action it proposes to take in response to the ACCC’s recommendations.