The Australian Competition and Consumer Commission (ACCC) has decided not to grant authorisation for the proposed regional mobile network arrangements between Telstra and TPG Telecom.
In doing so the ACCC has thrown down the gauntlet to the Albanese Government by arguing that infrastructure competition in regional and remote areas will remain a key plank of ACCC telecommunications competition policy.
The ACCC’s ideological position is unsound, and you don’t have to look very far to find evidence of this.
New Zealand has a successful telecommunications market with mandatory domestic roaming and a government funded black spot program that has funded more than 800 active sharing (neutral host) mobile towers used by all of New Zealand’s mobile network operators.
The mobile network operators in New Zealand have consistently opposed domestic roaming, just as the Australian mobile network operators did here in 2018 when the ACCC held an inquiry into whether or not domestic roaming should be declared.
The difference is that the New Zealand Government ignored the mobile network operators, whilst in Australia the ACCC decided not to declare domestic mobile roaming because, among other reasons, it argued that domestic mobile roaming would reduce infrastructure competition.
The ACCC does not appear to have provided any reasonable evidence to support this argument.
The reality is that in New Zealand, the consumers are the winners and in Australia people living in regional and remote areas continue to experience woeful mobile performance.
The Albanese Government is yet to respond to ACCC’s challenge.
Will the federal government intervene to reshape the regional mobile telecommunications market, similar to what the Rudd government did for the home broadband market in 2009, when the National Broadband Network was announced?
There are remarkable similarities between regional mobile telecommunications today and home broadband in 2009.
In 2009, Telstra was a near monopoly broadband infrastructure provider to about 80 per cent of Australian homes. Telstra was refusing to invest in an infrastructure upgrade without restricted competition, pricing guarantees and significant government co-funding.
The government and the remainder of the telecommunications industry opposed Telstra’s conditions, so the Rudd government moved forward with the National Broadband Network rollout.
Today, Telstra has a near monopoly for mobile and transit infrastructure in regional and remote Australia. A considerable portion of Telstra’s mobile and transit infrastructure network in regional and remote Australia has been co-funded by Federal, State, local government and business.
In some regional areas Optus has rolled out its own infrastructure, and to a far lesser extent, TPG Telecom has built out a regional mobile network. Both Optus and TPG Telecom have received co-funding from federal, state, local government and business, but the amount is dwarfed by what Telstra has received over the past three decades.
In urban areas, Optus and TPG Telecom have an agreement that is effectively a 3G and 4G mobile roaming agreement, according to the ACCC.
The proposed arrangement between Telstra and TPG Telecom would have put in place an effective mobile roaming agreement in an area covering about 17 per cent of the population living in the urban fringe and regional Australia.
However, this arrangement would mean that TPG Telecom would no longer have any reason to invest in infrastructure outside urban areas and the argument by Telstra that the arrangement would lead to better mobile performance was correctly identified by the ACCC as nonsense.
And this agreement would exclude Optus, unless Optus was prepared to agree to come on board with the terms set by Telstra. A totally implausible suggestion.
Telstra has sufficient spectrum to provide far better mobile performance in regional and remote areas, but for reasons that have not been made public appears to not provide enough data into regional and remote locations to satisfy used demand.
A study that I carried out between January to April 2022, in eight regional towns with a large first nations population, has found that whilst signal strength was reasonable in most locations, the download and upload speeds were found to be about 10 per cent of what consumers in urban areas experience on average.
The figures used to provide an indication of the urban mobile experience in the report were aggregated by Ookla as part of its global SpeedTest ranking. Ookla indicates that about 98 per cent of the figures came from testing carried out in urban areas.
Telstra has, on several occasions, patted itself on the back when it is ranked highest by Ookla, and it does not appear that Telstra has ever challenged Ookla’s figures as being inaccurate.
Telstra should not accept acclaim based on Ookla’s figures on the one hand, then question the validity of a report that includes Ookla’s figures as an indicator of urban mobile experience.
The fact that Telstra has done this recently appears to be an indicator that Telstra does not want to reasonably engage when confronted by data that does not paint a rosy picture in regional and remote Australia.
The government must intervene.
Recently the Minister for Communications Michelle Rowland convened a First Nations Digital Inclusion Roundtable that brought together First Nations experts and stakeholders from across the telecommunications, media and broadcasting sectors.
Unfortunately, academia appears to not have been invited, so I do hope that someone took along a copy of the report that I published last December.
The roundtable was a good first step, but at some point, the Albanese Government is going to be confronted by Telstra’s intransigence and condition setting.
Just as the Rudd government did between 2007 and 2009.
There are two options for the Albanese government.
The first is to follow New Zealand’s lead with mandatory domestic roaming and active sharing (neutral host) black spot co-funding for future funding rounds with regulated access pricing.
If the government puts this into motion, the ACCC will have no choice but to fall into line, bringing to an end the ideological infrastructure argument beyond spectrum usage.
The second is to clearly indicate to Telstra that it will not receive further black spot funding, nor will it be permitted to bid for further allotments of spectrum for regional areas until it fully separates into two companies that are separately listed on the Australian Stock Exchange with no entity associated with Telstra having more than a 20 per cent holding in the spun-off infrastructure business.
What this means is that we would end up with a wholesale mobile and transit infrastructure business in regional and remote areas that would be complimentary to NBN Co, and possibly a future a competitor to NBN Co if changes are made to the relevant legislation.
We now have an expensive third option in regional and remote Australia: Starlink, and we could have more satellite providers entering service soon.
So why not put in place an Australian competitor to NBN Co?
NBN Co’s performance has been woeful over the past decade, and the cost blowouts continue whilst progress on rolling out FTTP is glacial and opaque.
The Albanese government should put in place minimum broadband performance standards for Australian telecommunications, similar to what has been done in the US where minimum broadband speeds have been mandated now for nearly a decade.
The minimum should be 100/40 Mbps. Time to put to an end the marketing focus on download speeds whilst providing woefully slow upload speeds.
The Albanese government needs to go further and mandate minimum mobile performance standards, because no matter how hard it tries to convince the mobile network operators to up their game, this will not happen without government intervention.
And let us remember that for more than a decade, the government’s triannual Regional Telecommunications Reviews have pointed to poor mobile performance in areas where mobile coverage exists in regional and remote Australia.
If Telstra was so quick to dismiss the study that I carried out earlier this year, what do you think Telstra will do when the government’s $20 million mobile performance audit begins next year?
The sooner the government puts in place a regime that stops unnecessary duplicate spending on infrastructure in regional and remote areas the better. And Black Spot Programs that mandate co-funding for active sharing (neutral host) infrastructure with regulated access pricing.
It is time for far better mobile performance and competition for regional and remote Australia.
Mark Gregory is an Associate Professor in the School of Engineering at RMIT University
Do you know more? Contact James Riley via Email.
Why is Australia continuously behind the 8th ball & always playing catch up when it comes to tchnology. Yet we pride ourselves as having the best scientist and an abundance of natural resouces yet we always seem to elect incompetent politicians whose only aim is to follow their party’s line instead of holding their head high by making a difference for Australia
& Australian well being.