Vodafone loses legal fight with ACCC over roaming

Vodafone has lost its legal battle with the ACCC over what it clams was a "flawed process" by which the regulator decided not to force Telstra and Optus to open up their regional mobile networks to rivals.

The ACCC issued its draft decision that it would not declare a wholesale domestic mobile roaming service in June, claiming there was not enough evidence to show it would improve competition.

Such a service would allow consumers to access mobile services through another operator’s network when outside the coverage area of their service provider. 

Telstra - which would have been the most affected should the ACCC go ahead with the proposal - had argued against declaring a domestic mobile roaming service, claiming that allowing telcos to "freeload" would disincentivise them from building their own networks.

The ACCC's decision - formalised in late October - sparked the ire of Vodafone, which opted to take the regulator to court over the manner by which it came to the ruling. Telstra and Optus joined the ACCC in opposition to the case.

Vodafone had claimed the ACCC's ruling left regional Australia "hostage to Telstra".

"It denies the benefits of increased coverage, competition and choice to Australian mobile customers, especially hundreds of thousands of Australians living in regional and rural areas," Vodafone chief strategy officer Dan Lloyd said at the time.

"Too many Australians ... will have no choice but to pay Telstra’s mobile premium which totals $1.4 billion per year. Since 2006, Telstra has received around $2 billion in government subsidies and funding to build its regional networks, yet it only spends $150 million per year on mobile in regional areas."

However, the telco today lost its battle after Justice Griffiths dismissed its appeal for a judicial review of the ACCC's decision.  

Vodafone's specific grievance was that the ACCC had been "too vague" in its process by failing to define what a domestic roaming service was.

The telco had claimed it would be impossible to properly work out whether a domestic mobile roaming service was in the long term interest of end users without such a definition.

But Griffiths today said the ACCC had not failed in its process and was not required by law to have a highly detailed and specifically-defined term for a service during a public inquiry.

"It may be accepted that if the ACCC ultimately determines to declare an eligible service the declaration must have sufficient specificity so that those who are affected by it, particularly access providers and access seekers, know precisely what are its terms and limits," Griffiths said.

"Merely because it is essential that a declaration have a high and precise degree of specificity does not mean that the same specificity is required throughout the entire course of a ... public inquiry."

Griffiths left it to the ACCC and Vodafone to work out the payment of costs within the next month.

Vodafone's Lloyd today said the telco would review the judgment, but its initial reaction was "one of concern" about what this meant for the "clarity and robustness required of the ACCC" with public inquiries.

"Despite the court’s decision, there is clearly still a problem that needs to be solved. The status quo is hurting regional Australia," Lloyd said.

"Taxpayers have largely funded Telstra’s regional mobile network, but people in these areas do not have the mobile coverage and choice they want, need and deserve.

"We still firmly believe domestic roaming is Australia’s best opportunity to boost coverage and competition in areas where it doesn’t currently exist."