Government intervention is urgently needed to revamp the telecommunications market in regional and rural areas. Failure to act could set back telecommunications competition in regional and rural areas.
The intervention should occur before the Australian Competition and Consumer Commission (ACCC) releases its determination on the proposal by Telstra and TPG Telecom for three interrelated agreements that would put in place a Multi-Operator Core Network (MOCN) arrangement.
The three agreements include a MOCN Service Agreement, a Spectrum Authorisation Agreement, and a Mobile Site Transition Agreement.
The merger authorisation lodged with the ACCC by Telstra and TPG Telecom on 23 May 2022 covers about 17 per cent of the Australian population and has been called the Regional Coverage Zone. A key aspect of the agreement between Telstra and TPG Telecom is a spectrum sharing arrangement.
The ACCC released preliminary views on the application for merger authorisation on 30 September 2022. There are three important considerations that were not mentioned in the ACCC’s statement of preliminary views.
The first consideration is the ACCC’s failure to declare domestic mobile roaming in 2018 after an inquiry and calls for this to occur in regional and remote areas. Over the past five years, the reasons given by the ACCC for this decision have been shown to be incorrect.
The ACCC did not mention this inquiry in its statement of preliminary views. Isn’t what Telstra and TPG Telecom is proposing basically the same as domestic mobile roaming in the Regional Coverage Zone?
A domestic mobile roaming declaration in regional and remote areas would ensure that all carriers are participants. It would also ensure that existing infrastructure is utilised.
A spectrum sharing arrangement for regional and remote areas could be put in place through regulation that is cost neutral and does not disadvantage network operators.
The proposed arrangement between Telstra and TPG Telecom highlights the need for regulation relating to open, fair and competitive access to infrastructure in regional and remote Australia.
The proposed arrangement between Telstra and TPG Telecom does not include Optus. Optus has expressed the valid concern that if it were to seek to become a participant this would only occur with terms that benefit its competitors.
Would Optus be required to shift ownership of its towers in regional and remote areas to Telstra similar to what is proposed for TPG Telecom?
In New Zealand domestic mobile roaming regulation is more advanced than in Australia. The market has adjusted to this reality and domestic roaming has not dampened infrastructure investment in urban areas. In under-served regional and remote areas, the New Zealand Government is co-funding the rollout of neutral host shared infrastructure that services all carriers.
A considerable component of Telstra’s infrastructure in regional and remote Australia has been funded or co-funded by the Commonwealth, states and local councils over past decades.
The arrangement between Telstra and TPG Telecom creates a de facto infrastructure monopoly in the Regional Coverage Zone, because Optus is unlikely to compete.
Is this the dystopian future where the telecommunications market collapses back to a pre-1997 monopoly with Telstra setting access prices and conditions that destroy efforts to move to an open, fair and competitive market?
The second consideration not mentioned by the ACCC is the government’s recent announcement that it would prioritise neutral host (also known as active sharing) submissions for future mobile black spot funding and other infrastructure funding in regional and remote areas.
In 2018, the Australian carriers argued against domestic mobile roaming. For Optus at least, this is now looking like an own goal.
The government should have identified the shift in sentiment when the infrastructure investment projected by the ACCC as one reason for not declaring mobile roaming did not occur.
There is a synergy between domestic mobile roaming in regional and remote areas and future funding for neutral host infrastructure.
For this shift in the provision of mobile in regional and remote areas to occur successfully, the government should intervene now, not after the ACCC makes a potentially flawed decision with a rationale that is ideologically based.
For the mobile network operators to cooperate on the move to neutral host infrastructure, the government will need to up the ante and mandate regulated neutral host infrastructure solutions for all future publicly co-funded programs.
Efforts to trial neutral host infrastructure have so far been thwarted by one or more of the mobile network operators refusing to participate. The cost to the public of this intransigence is already in the millions and rising.
The third consideration not mentioned by the ACCC is performance. What performance outcomes should consumers expect if the proposed arrangement commences?
There are no minimum performance standards for mobile and in regional and remote areas performance is far below that found in urban areas. Where is the public benefit in this?
There is a need for performance to be a major consideration of every decision related to the provision of telecommunications services. Australians have had to put up with third world outcomes for too long and it is time the ACCC be required to focus on access and performance.
The government must end this impasse, and it needs to do so before the ACCC announces its determination on 22 December.
Mark Gregory is an Associate Professor in the School of Engineering at RMIT University
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Markets always trend to monopoly. The big always eat the small. Price takers always want to become price makers. Sneaky always beats honest. Our blind faith in markets defies logic. Personally, I have no faith in them. Scamming is the business model.
My sense is that this conversation is perhaps a bit too little too late. The concept of a phone call in essentially dead already some demographics are worse than others, our personal data collection devices are only empowered to serve the corporations that distribute them. Why would Apple, Oppo or Google even care about 17% of Australia’s remote population they must be uneconomic to service.