ISPs not interested in regional DSLAMs: Telstra

Speaking to delegates of the CommsDay Summit, Kate McKenzie hauled the Australian Competition and Consumer Commission (ACCC) over the coals for its recent decision to bring Federal Court proceedings against Telstra.

The ACCC has alleged Telstra refused access seeker requests for interconnection at seven key metropolitan exchanges by claiming there was no capacity on the main distribution frames available.

Telstra has previously denied the claims and said that the problems had already been fixed.

But McKenzie today branded the proceedings a "non-problem" in the face of Australia's market failure to encourage competitor investment in broadband in regional and rural Australia.

McKenzie said only 537 of Telstra's 5,300-plus exchanges contained competitor DSLAMs. The majority of these were in city areas, she said.

"Why is that number so low?" she asked rhetorically.

"Because Telstra won't provide access? No. Because there is some technical limitation? No. The real answer is because there is absolutely no interest from our competitors in serving the vast majority of the geographic area of Australia because there's no money in it for them."

McKenzie cited a shopping list of examples of exchanges to support Telstra's position, using the latest Telstra figures as a source.

She said in Parramatta in western Sydney, 12 competitors have installed approximately 153 DSLAMs connecting 61,200 customers; in Lonsdale Street in Melbourne, 12 competitors had installed 48 racks with 114 DSLAMs to service 45,600 customers; and in the Charlotte Street exchange in Brisbane, 12 competitors had some 96 DSLAMs servicing 38,400 customers.

"I'm sure you get the picture - the busiest exchanges are bursting at the seams where competitors are installing fibre and DSLAMs where the big populations are, where they can make a tidy profit," McKenzie said.

She then contrasted the figures to the drop-off of competitors in exchanges once outside of metropolitan areas.

"From Lonsdale Street, drive to Ballarat and there are just four broadband providers, then 92km further down the road Ararat [approximately 205km from Melbourne] there's only one competitor to Telstra," McKenzie said.

"Or take Sydney - drive 80km to Wollongong and there's 11 broadband competitors. Another 5km to Unanderra there are four competitors, but in a little town nearby called Huskisson you have just one choice - Telstra."

"Its not hard to see where people are missing out on competition," McKenzie said.

McKenzie effectively called on the ACCC to focus on encouraging competition in regional and rural Australia rather than pursuing Telstra over alleged accessibility issues into already competitive exchanges .

"The fact Telstra is subsidising service provision in large parts of the industry would be a better focus of activity [for the ACCC]," McKenzie said.

"Clearly government or regulatory intervention should be about fixing problems that exist [rather than ones that don't]. The pursuit [of Telstra by the regulator] is [for] a non-problem."

She continued: "Why the heck then is the regulator in this country focused on a non-problem? A very unimportant issue - the completely relentless pursuit of artificially manufactured competition where real competition already exists.

"Clearly there needs to be a focus on where there is market failure. And it ain't here in the cities where competitors are falling over each other to get their gear into Telstra exchanges, to buy services at below cost rates set by the ACCC, to then on-sell to consumers.

"There's no problem for competitors here, including no problem with access to exchanges."