Mobile Network Charges – Independent Review – Australian Competition and Consumer Commission

01 October 2014

On 17 June 2014, the Australian Competition and Consumer Commission (ACCC) announced that it will regulate the price that a mobile phone network operator can charge other networks for connecting calls and text messages to its network. The declaration will be in place until 30 June 2019. The ACCC had previously regulated the price of connecting calls between networks, but not text messages. The ACCC decision was informed by the Domestic Mobile Terminating Access Service Declaration Inquiry (Inquiry). The Inquiry considered which services operated by mobile phone networks should have their price regulated. The assessment of the Inquiry was that there was no effective substitute for mobile phone calls and text messages. Additionally the Inquiry concluded that mobile networks have the ability and incentive to set unreasonable terms with other networks which could cause detriment to consumers in the long run. The inquiry stated that the benefits of regulation will be that prices that networks charge each other will be cost based and that it will promote connectivity between networks. The decision does not change the price that mobile phone networks can charge consumers. The Inquiry was certified by the ACCC as meeting the requirements of a Regulation Impact Statement. The Office of Best Practice Regulation (OBPR) does not assess independent reviews. In certifying the Inquiry the ACCC did not follow best practice as the self-assessment and agreement to regulatory costs occurred after the final decision. The ACCC estimates the average annual regulatory cost is approximately $2000 and it has identified offsets to this cost through the removal of certain record keeping requirements. The OBPR has agreed to the estimated change in regulatory burden.