Senator Richard Alston, the Minister for Communications, Information Technology and the Arts, has signed a direction to the Australian Communications Authority (ACA) to vary the Customer Service Guarantee (CSG) to introduce a temporary exemption scheme, whereby a telephone company will be exempt from CSG obligations while they establish themselves in the new market.
The Australian Telecommunications Users Group (ATUG) has welcomed the proposal, describing it as "another initiative to promote competition". John Pack, the technical services executive at ATUG, likened it to a similar scheme in Japan which goes by the name 'asymmetrical regulation'.
"What it's doing is cutting down on the rigorous constraints [which are] imposed on the incumbent for people who want to start up in that area," said Pack. "It allows them to move into some of these areas so they can get established, but as they get bigger they come under the same constraints as the incumbent."
"It's quite a positive to move to expand competition in rural areas and the fixed phone market in general," he said.
The move is in response to a recent ACA report, the Review of the Telecommunications Customer Service Guarantee Arrangements, which found that blanket application of the CSG might be a barrier to entry into the fixed phone market.
The new regulation is designed to encourage competition and growth in the fixed phone market, and through that decrease price and increase choice, quality and innovation.
The CSG was introduced in 1998 which requires telephone companies to meet specified timeframes for the connection and repair of telephone services. If they fail this they are required by law to make automatic compensation payments to customers.
The new exemption scheme will apply only to telephone companies with a small share of the market in a specific geographic area, and is intended to encourage them to offer services in new areas. Telecommunications companies will have to prove they do not supply fixed phone services on a medium or large scale in the area to be eligible for the proposed exemption. They will have to inform potential customers of their exemption from the CSG and the implications of that.
As a universal service provider for the whole of Australia, Telstra will not be eligible for an exemption under the charges.
Other aspects of the new direction include new arrangements for claiming exemptions due to external circumstances, such as infrastructure damage cause by bushfires or flooding. Telecommunications companies will only be able to claim an exemption if the area in which the exemption is being claimed is directly affected by the event in question or by the company's need to move staff or equipment to the area directly affected.
