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Optus tells Department of Comms to sit down and shut up

While mobile carriers join telco security smackdown

The relationship between the Australian government and the telco sector continues to deteriorate, with more carriers pushing back against Canberra's micro-management of their operations, with both industry regulation and security reforms as ongoing battlegrounds.

Optus is the latest to raise its voice against the Department of Communications' intervention into the Telstra wholesale line rental inquiry.

Last week, it emerged that the Department had taken the unusual step of telling the Australian Competition and Consumer Commission (ACCC) not to cut Telstra's wholesale line rental prices. That echoed a letter in July 2014 from communications minister Malcolm Turnbull and finance minister Matthias Cormann making the startling argument that lower prices are bad for consumers.

Both the Turnbull/Cormann letter and the DoC submission also warned that lower Telstra wholesale prices would undermine the National Broadband Network.

Optus is having none of it. Not only does its submission to the ACCC say the DoC doesn't understand how wholesale prices are set, it also questions the appropriateness of the Department's action.

“On a factual level Optus considers that the submission appears to misunderstand the detailed modelling and cost allocation issues considered by the ACCC”, the submission states, since “the proposed access prices are largely based on Telstra's data and cost allocation factors”.

“Changes to Telstra’s cost of capital are the main driver of the price decline; and specifically lower Government bond rates. This has little to do with ACCC discretion and nothing to do with NBN”, the submission adds.

Noting also that Telstra's retail costs have nothing to do with what wholesale access seekers should pay, the submission claims “the current approach is more likely to achieve cost over recovery” and that the proposed price cut will have “little, if any, impact on Telstra's ability to invest”.

But the strongest words are saved for the DoC's decision to intervene at all:

“This intervention is unlikely to build confidence in the policy settings surrounding the NBN. At the core of the Department’s submission is the request that access prices be kept high now so that consumers don’t face any price changes when they migrate to the NBN. This proposition is inconsistent with consumer interests and the matters that the ACCC has to take into account in setting access prices.”

Other carriers, such as TPG and Macquarie Telecom, have questioned the DoC's belief that lower ADSL prices will somehow stop consumers from migrating to the National Broadband Network when it's built.

Quite apart from the mandatory nature of the migration, once the patchwork of twisted-pair and HFC networks is handed over to nbnTM, the two carriers reckon retailers like the NBN and want their customers to migrate.

Security reforms still attracting ire

Meanwhile, Communications Day also reports that the Australian Mobile Telecommunications Association (AMTA) has weighed into the governments planned telecommunications security reforms.

AMTA's concerns come in spite of communications minister Malcolm Turnbull last week taking to the airwaves to try and reassure the industry.

Repeating the government's deregulation mantra – “we are a government that wants to deregulate, not re-regulate” – Turnbull said on Radio National the government would “work constructively” with the industry.

“Cyber security and network security are important for everybody,” he told listeners, adding that: “We all have a vested interested in our telecommunications being safe from intrusion and interference”, whether from other countries or “criminal hackers”.

AMTA's complaint echoes that made by the Communications Alliance last week – that the industry is already struggling to prepare for the government's Internet filter and telecommunications data retention laws, and that the appointment of the secretary of the Attorney-General's Department as the industry's chief security officer is a step too far.

AMTA CEO Chris Altheus added that the government is “giving itself too much open-ended discretion and too little protection for industry”. ®

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