ACCC Launches Market Study into Communications Sector

The Australian Competition and Consumer Commission (ACCC) Chairman, Rod Sims announced at the ACCC/AER Regulatory Conference during August 2016, that the ACCC’s next market study will focus on the Australian Communications Sector, as revealed in a recent ACCC Media Release.

The market study will examine a wide range of issues concerning competition and efficiency in communications markets and will involve consultation with industry participants and consumers.

Mr Sims said Australia is witnessing a significant change in the way communications occur:

About the Market Study

The ACCC is undertaking the market study to ensure that the implications of developments in the communication sector are well understood, to identify issues that prevent relevant markets from delivering economically efficient and competitive outcomes in the interests of consumers, and to identify options, if required, to address these issues.

The study will:

• identify current and emerging trends and issues that are likely to significantly affect the efficiency and level of competition in relevant communication markets over the next 3-5 years, including issues associated with market power and the consequences of it being exercised;
• consider these trends and issues for relevant markets, which will include, but not be limited to, those for the supply of:
• fixed and mobile network services;
• core and aggregation network services such as internet protocol (IP) switching and domestic and international transmission; and
• services using over the top platforms and content delivery mechanisms.
• consider the effect of consolidation, structural change and emerging business models in the Australian communications sector on efficiency and competition;
• consider whether the transparency and comparability of consumer product information and costs of switching service provider impede competitive outcomes; and
• make findings and identify options that would better place the ACCC to address material issues, including in relation to whether current ACCC regulatory focus is appropriate to meet the requirements of the changing communications landscape.

Mr Sims said that telecommunications companies have previously raised concerns about competition problems in the industry, but would probably not be expecting a market study. The market study will give the regulator a chance to examine whether network capacity can meet consumer demands and access to dark (unused) fibre. The study will also examine over-the-top communications markets, such as social media and marketplaces.

Interaction with stakeholders

The ACCC has had preliminary discussions with a number of stakeholders. Some of the changes occurring suggest it is timely to examine:

• the changing structure of communications markets, particularly the transition to a fixed-line market in which NBN Co is the wholesale provider to retail service providers, and consolidation and market concentration within the retail sector;
• the growth in availability of services provided “over the top” (OTT) using the internet as a delivery platform. These services include social network platforms, communications and marketplace apps;
• the exponential growth in the demand for bandwidth and data in recent years, largely reflecting the emergence of streaming music and video content services, placing significant demands on network capacity; and
• the increased use of mobile data by consumers and the increasing preference for mobile as a way to access the internet. The availability of WiFi services is also facilitating the use of mobile services and further improvements are anticipated with the deployment of 5G.

Release of an Issues Paper

The ACCC will release an Issues Paper and a Draft of its findings for comment prior to completing the market study in 2017. Working documents, public submissions and updates on the progress of the market study will be published as they are made available.

It is anticipated that the Issues Paper will be released towards the end of August 2016.

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ACCC to undertake market study of the communications sector – ACCC Release MR 144/16

Communications sector market study – ACCC

ACCC launching market study into communications sector – smh.com.au