Optus wants gov response to OTTs 'free riding' on telco networks

Optus has called for regulation to stop over-the-top service providers getting a 'free lunch' from Australia’s telecommunications networks.

In a speech to the CommsDay Summit in Melbourne, the carrier’s vice president for regulatory and public affairs Andrew Sheridan said there is “a growing distortion between our investment costs and the revenue being generated by third parties free riding on our infrastructure”.

“More and more digital providers with increasingly data-hungry services are leveraging our investments to build highly profitable businesses," Sheridan said.

While carriers have to expand their network capacity to cater for growing data loads, Sheridan said, “We see little if any contribution towards the costs of this demand from over-the-top service providers”.

He asserted that large gaming and social media companies are getting “a massive cross-subsidy” from Australia’s telco sector, internet users and taxpayers, and called on the federal government to consider “a policy response” to the problem.

Sheridan is also unimpressed with current federal government policies for regional telecommunications.

He told the summit “the cards are stacked against competitors investing in regional areas”.

“Current policy settings – whilst well-meaning – help to entrench incumbency and act as a barrier to competitive investment," Sheridan said.

For example, he highlighted the $150 million in annual universal service subsidies Telstra receives, and its three-quarter share of mobile blackspot funding.

Improved access, affordability and reliability won’t be delivered by “further subsidy schemes for the incumbent," he said.

“These outcomes will be best served by encouraging investment in competitive networks and alternative technologies, to promote innovation and choice."

Sheridan also highlighted upcoming new regulation such as the ACMA’s proposed customer identification rules, the application of the consumer data right to the telco sector, and changes to Australia’s privacy and security regimes.

“It feels like we’ve gone from safety net to straitjacket regulation … Individually these all have merit,” he said, “but they will each add cost to the industry without generating a single dollar in revenue.”