Review of access to Telstra Exchange Facilities

Record Keeping and Reporting Rules

Consultation Paper

May 2017


© Commonwealth of Australia 2017

This work is copyright. Apart from any use permitted by the Copyright Act 1968, no part may be reproduced without permission of the Australian Competition and Consumer Commission. Requests and inquiries concerning reproduction and rights should be addressed to the Director Publishing, Australian Competition and Consumer Commission, 23, Marcus Clarke Street, Canberra, Australian Capital Territory 2601.

1Introduction

1.1Purpose

The purpose of this consultation paper is to seek views from interested stakeholders on the Australian Competition and Consumer Commission’s (ACCC) review of the Access to Telstra Exchange Facilities Record Keeping and Reporting Rules (TEF RKR). The current TEF RKR is due to expire on 14 July 2017.

1.2Reasons for review

The TEF RKR was first made in July 2008 pursuant to section 151BU of the Trade Practices Act 1974 (now the Competition and Consumer Act 2010(CCA)). The TEF RKR was extended on 14July 2011 and again on 14 July 2014. Clause 2 of the RKR states that the ACCC will conduct a review of the rules.

1.3Submission process

Submissions should be provided by 5.00pm on 6 June 2017.

Submission of commercial-in-confidence material

All submissions will be considered by the ACCC as public submissions and will be posted on the ACCC website. Interested parties wishing to submit commercial-in-confidence material to the ACCC should submit both a public version and commercial-in-confidence version of their submission. The ACCC has issued a guideline setting out the process parties should follow when submitting confidential information to communications inquiries commenced by the ACCC. The guideline is available on the ACCC website at:

Contact officer and submission lodgement details

Inquiries in the first instance should be directed to David Hinitt at (02) 9230 9148.

Please email submissions to:

Mr David HinittMr Grahame O’Leary

Senior Project OfficerDirector

Australian Competition & ConsumerAustralian Competition & Consumer

CommissionCommission

(02) 9230 9148(02) 9230 3832

2The Access to Telstra Exchange Facilities RKR

2.1Regulatory framework

Under section 151BU of the CCA, the ACCC can make record keeping rules (RKRs). RKRs may require one or more specified carriers to keep and retain records and give reports to the ACCC consisting of information contained in those records. The records must contain information relevant to the ACCC’s statutory functions which includes information that is relevant to:

  • determining compliance with the competition rule (section 151AK of the CCA); or
  • determining compliance with tariff filing directions; or
  • the operation of Part XIB of the CCA (other than Division 6); or
  • the operation of Part XIC of the CCA; or
  • the operation of the National Broadband Network Companies Act 2011, or regulations under that Act;
  • the operation of Part 9 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 which deals with regulation of Telstra’s charges; or
  • the operation of Division 3, Part 20 of the Telecommunications Act 1997 which deals with the Rules of Conduct relating to dealings with international telecommunications operators.

Sections 151BUA, 151BUB and 151BUC of the CCA give the ACCC the power to disclose, or to require carriers or carriage service providers to disclose, reports,or extracts of reports, prepared in accordance with an RKR.

The revised 2014 TEF RKR is atAttachment A.

2.2Background -on Telstra Exchange Facilities

As the owner and operator of exchange buildings, Telstra determines the processes by which access seekers can install their own infrastructure, for example Digital Subscriber Line Access Multiplexer(DSLAM) equipment. This is referred to as Telstra Exchange Building Access or sometimes Telstra Equipment and Buildings Access (TEBA). These processes are essential for access seekers to provide downstream services to end-users in competition with Telstra.

TEBA spaceis a separate part of Telstra’s exchange that generally contains ‘racks’ or floor space where DSLAMs and other equipment can be installed. Space within the Telstra exchange building is also used for Telstra DSLAMs, Telstra PSTN switches (providing voice services), mobile telephony equipment and other types of equipment.Some areas in Telstra exchanges are used by NBN to house NBN related equipment. Generally, access seekers can request exchange access via the TEBA Ordering Process, which involves the following steps:

  1. Preliminary Study Request (PSR) – the access seeker submits a request to Telstra detailing the amount of floor space and main distribution frame (MDF) blocks required in a particular exchange. Telstra must provide a response within 10 business days of receiving a request.
  2. Design and Construction Proposal (D&CP) – following Telstra’s acceptance of a PSR, the access seeker must submit a D&CP within 20 business days for work to be undertaken in the exchange.
  3. TEBA D&CP Assessment – Telstra assesses the D&CP in accordance with its technical standards and PSR allocations within 15 business days after receipt of the proposal.
  4. TEBA Construction – the access seeker has 30 business days to complete the construction activities as described in the approved D&CP. The access seeker may request an extension of time within the first 15 business days.
  5. Joint Completion Inspection (JCI) – a JCI needs to be undertaken by both parties within 15 business days of a JCI request.

Once an access seeker submits a request, the request is placed in a queue at that exchange. Where access seekers can carry out works concurrently, multiple access seekers are all assigned position one in the queue. Where work is not able to be concurrently carried out, a queue with multiple access seekers is sequential.

If an exchange runs out of equipment space, such as rack space, access seekers are unable to deploy new equipment until further space is added or redundant space is recovered. An exchange that has no available rack space is known as “Racks Capped”. “Potentially Racks Capped” is where there is potential for rack space to be addressed by building works.

In addition to rack space, access seekers require access to the Main Distribution Frame (MDF) which is located within each exchange. The MDF connects access seeker telecommunications equipment (e.g. DSLAMs) to the copper wires that connect to Telstra’s customer access network (CAN). If the MDF runs out of space, access seekers will be unable to connect their equipment to customers connected to the CAN. This is known as “MDF Capped”. A capped MDF that can be modified to provide more space is known as “Potentially MDF Capped”.

Telstra also determines whether there is sufficient utilities capacity (e.g. electricity and cooling) before it allows an access seeker to install andoperate its own equipment. Telstra limits access to exchanges that have reached operating capacity until utilities can be upgraded.

2.3Information obtained under the TEF RKR

Information provided in accordance with the TEF RKR informs the ACCC of exchanges in which delays are occurring, reasons for delays and the duration of any such delays. It also provides transparency around Telstra’s internal process for determining if an exchange is ‘rack capped’, ‘MDF capped’, and/or potentially capped.

In summary, the RKR requires that Telstra provide information on an exchange service area (ESA) basis on:

  • the number of queued access seekers
  • details around preliminary study requests and joint completion inspections (allowing some transparency of queue developments)
  • MDF capped, racks capped and potentially capped exchanges (including, the number of MDF blocks or amount of floor space reserved and the number of racks needed for Telstra to meet its anticipated requirements)
  • scale floor plans for racks capped and potentially racks capped exchanges
  • details of construction works required to be undertaken by access seekers in potentially capped exchanges
  • details in relation to potentially capped exchanges regarding preliminary study requests and design and construction proposals (in relation to construction works), and
  • details of potentially capped exchanges where access seekers have started construction works.

The RKR requires Telstra to submit its monthly report to the ACCC within 15 business days after the reporting date.

The RKR only applies to TEBA related activity and does not apply to the space in Telstra Exchange buildings that is operated by NBN Co.

2.4Disclosure Direction

The ACCC, pursuant to subsection 151BUC(2) of the CCA, has issued Disclosure Directions in 2011 and 2014 requiring Telstra to provide, as an annexure to its report, a summary of the following:

  • number of joint completion inspections undertaken during the period,
  • number of exchanges (at the end of reporting period) which areracks and/ or MDF capped, or potential racks and/or MDF capped,
  • name of each exchange with status ‘potential’ and the construction work required, and
  • name of each exchange with queued access seekers, the name of each access seeker in the specified exchange and the queue order of each named access seeker.

The ACCC makes this summary available on its website on a monthly basis and Telstra publishes the monthly summary on the Telstra Wholesale website. The Disclosure Direction is at Attachment B.

2.5Use of information obtained under the TEF RKR

The information obtained under the TEF RKR is relevant to the ACCC’s functions under PartsXIB and XIC of the CCA. The ACCC may use the TEF RKR information to:

  • monitor queues at exchanges and capped exchanges, including in relation to the national broadband network points of interconnect (NBN POIs) which are located in Telstra exchanges
  • consider potential issues involving access to facilities used to access regulated services
  • monitor Telstra’s compliance with its standard access obligations (SAOs)under section 152AR of the CCA, and
  • assist it to perform its functions under Parts XIB and XIC of the CCA .

In Section 2.8 below, we set out the instances in relation to which, we have raised issues regarding the information received under the TEF RKR with Telstra.

2.62014 review of the TEF RKR

The TEF RKR has been reviewed every three years since its inception in 2008 and was most recently reviewed and extended in 2014. The ACCC’s decision to extend the TEF RKR is set out in the ACCC’s Reasons for decision.

The ACCC considered that extending the TEF RKR would allow the ACCC to continue to oversee and respond to any concerns regarding TEBA access. The TEF RKR would also assist with themonitoringof access to those exchanges being used as NBN POIs or to house NBN equipment during the rollout of the NBN.

The ACCC considered whether the protections provided byTelstra’s Structural Separation Undertaking (SSU) would replace the need for the TEF RKR. However, it decided that the additional transparency provided by the publication of the TEF RKR summary data was more specific and involved public disclosure of the RKR information through the Disclosure Direction.

Under the SSU[1], Telstra is committed to delivering a variety of TEBA related equivalency outcomes. The SSU codifies some of Telstra’s previous TEBA procedures and mechanisms that the TEF RKR was set up to monitor. Clause 12 of the SSU (Access to Telstra Exchange Buildings Clause) includes rules regarding the allocation of exchange space and obligations for TEBA queue management. However, the SSU only requires Telstra to report confidentially to the ACCC on TEBA access issues, not publicly. The ACCC considered that the public disclosure of queuing arrangements would help industry participants in their network planning considerations.

2.7ACCC’s observations of information received under the TEF RKR

The ACCC has actively monitored the changes to the exchange queuing reported by Telstra under the TEF RKR. The number of exchanges with queues as reported under the TEF RKR is set out in Figure 1 below for the period from 2008 to March 2017.[2]

Figure 1 - Telstra exchanges with queued access seekers

The decline in queued exchanges in the 2008 to 2012 period are likely to be related to the improvements in Telstra’s TEBA processes which were implemented by Telstra in response to action taken by the ACCC against Telstra in 2009.

Between March 2015 and November 2015 the ACCC observed a sharp increase in the number of Telstra exchanges with queued access seekers. Telstra indicated that this queuing appeared to relate to renewed DSLAM activity, and no other TEBA access issues. The ACCC notes that this activity has declined significantly since the peak in November 2015.

3Matters for consultation

The ACCC is seeking submissions from interested parties on the following matters.

3.1Continued operation of the TEF RKR

The TEF RKR is due to expire on 14 July 2017. The ACCC is seeking views on whether the TEF RKR should be:

  1. extended
  2. extended and varied, or
  3. allowed to expire.

The ACCC considers that the decline in reported access queues may indicate either that the issues that required the TEF RKR to be made may have largely been resolved, or that the transparency provided over Telstra processes operate as a significant deterrent to anti-competitive behaviour.

We are interested in views of stakeholders about whether the continued transparency over Telstra’s processes for TEBA have led to the decline in access queues or whether there are other reasons. Submissions should be explicit in detailing access seeker requirements and experiences in accessing Telstra exchanges in order for the ACCC to assess the need for the continued operation of the TEF RKR.

The ACCC is also seeking views on whether the TEF RKR remains necessary as the NBN is rolled out, given the transition away from DSL based infrastructure (such as DSLAMs) to the NBN. NBN equipment is generally located in a separate part of the exchange and does not require floor space. Indications suggest that issues relating to capped exchanges have not emerged as an issue during the rollout of the NBN to date. If the TEF RKR is considered necessary, for how much longer should the RKR and/or the disclosure direction remain in place and is any variation to the RKR required?

The ACCC asks submitters to specify reasons for their views, together with examples of any issues that may have arisen since the TEF RKR was remade in 2014 in support of their submission.

Submissions which support an extension of the operation of the TEF RKR should also include details about the proposed length for any extension.

3.2Disclosure Direction

If the TEF RKR is to be extended, or varied and extended, the ACCC will also need to determine whether a new Disclosure Direction should be issued to Telstra. It may do so if it is satisfied that the disclosure of particular extracts from the RKR report is likely to promote competition or facilitate the operation of, among other things, Parts XIB or XIC.

The ACCC understands that access seekers use the publicly available information published in the Disclosure Direction. Access seekers have previously advised that ACCC that information from the TEF RKR assists with their network planning as it includes information about capped or potentially capped exchanges and investment in exchanges. However, the ACCC also notes that if the levels of queued access seekers remain at the current levels (i.e. below 20), the utility of the Disclosure Direction in assisting access seekers in planning may be reduced.

The ACCC seeks submissions on how access seekers may utilise information included in the TEF RKR report and whether a Disclosure Direction would promote competition or ensure compliance with parts XIB or XIC. The ACCC also seeks view whether the Disclosure Direction should be reissued in its current form or be revised if the TEF RKR is extended.The Disclosure Direction is at Attachment B.

3.3Any other matters

The ACCC seeks comments from interested parties on any other matter relevant to the TEF RKR, including any other reporting requirements that might arise from the transition from legacy copper services to the NBN.

4Conclusion

The TEF RKR was last reviewed and extended in 2014 for a further three years with some minor amendments. At that time the ACCC considered the TEF RKR would provide independent oversight of access to Telstra exchange facilities and would assist the ACCC in assessing Telstra’s compliance with its SAOs. The ACCC also sought to actively monitor any issues with TEBA space that related to the NBN rollout. The ACCC notes that the TEF RKR reports have not revealed any systemic issues relating to NBN rollout.

As part of its review of the rules under clause 2 of the RKR, the ACCC seeks views from stakeholders on whether the TEF RKR should be:

  1. extended in its current form and if so, the length of the extension
  2. extended and varied, and if so, the length of the extension, details of the variation and whether a Disclosure Direction should be reissued, or
  3. allowed to expire.

Submissions should address each of the above scenarios and after considering submissions from stakeholders, the ACCC will make a final decision on whether to extend, extend and vary, or allow the TEF RKR to expire. If the ACCC decides to allow the TEF RKR to expire, the obligation on Telstra to report to the ACCC will cease on 14 July 2017, including the obligations under the Disclosure Direction. The ACCC will publish its decision on the ACCC website and notify submitters to this inquiry directly via email.