Telstra may have to provide Vodafone, TPG and Optus with access to its extensive rural and regional mobile phone network if Vodafone is successful in its federal court challenge to the competition regulator's draft decision on mobile roaming.
In a surprise move on Friday,
Vodafone filed for a judicial review of the process followed by the Australian Competition and Consumer Commission's in its domestic roaming inquiry.
This sort of judicial review is unprecedented. The fact that it has never happened before raises uncertainty about what will happen if Vodafone is successful.
Will the court order the ACCC to start its inquiry all over again? Will it rescind the findings in the draft decision issued earlier this month?
Vodafone has employed leading barrister, Noel Hutley, SC, to handle its case and law firm Norton Rose.
Vodafone will ask the court to rule on two fundamental questions: What was the ACCC legally required to do when conducting its inquiry?; and did the ACCC fulfil its legal obligations?
The case will swing on the court's interpretation of section 152AB and section 152AL of the Competition and Consumer Act. These relate to the making of declarations in relation to a telecommunications carriage service.
If Vodafone wins the case, it will be a blow to the credibility of the ACCC's telecommunications division.
ACCC chairman Rod Sims said on Friday that "everybody has a right to appeal, that's how the law works".
"I just acknowledge that Vodafone has got the right to do this," he said.
The court documents have not been released. But in a statement to the media on Friday Vodafone said that the ACCC failed to follow its legal obligations and identify a detailed description of the roaming service it was investigating.
Vodafone claims that during the ACCC's previous inquiry into roaming in 2004 it clearly defined the service it was investigating. The 2004 inquiry found there was sufficient competition and that no declaration of the roaming service was required.
The ACCC's 2004 draft report into roaming included an appendix with a description of the service being investigated. This was allegedly not included in the latest draft report by the ACCC.
Vodafone now claims that the ACCC was legally required to provide a 'service description" in its draft report to show what it was investigating.
"A service description for a domestic mobile roaming service could define the scope of the service, including, for example, by limiting domestic roaming to regional Australia or by limiting domestic roaming only to areas with one or two mobile networks," Vodafone said in a statement.
It said the ACCC's "own declaration guidelines state that specifically identifying an appropriate service description is an important and key step in a declaration inquiry process".
"Defining the specific service which could be declared is fundamental to the process.
"Without knowing the parameters of the proposed declared service, it is not possible for the ACCC to conduct its analysis of whether regulating such a service would be in the long term interests of end users or not, and it is not possible for interested parties to provide relevant and meaningful submissions in response to the draft report.
In a
draft decision published on May 5, the ACCC said it found insufficient evidence that declaration of the rural and regional mobile networks of Telstra and Optus would improve the current state of competition.
"The ACCC's preliminary finding is that the national retail mobile services market is currently exhibiting signs of reasonably effective competition," the ACCC said in its draft report
"Service providers compete on a broad range of product features such as price, geographic coverage, service quality, network technology, inclusions and content.
"Consistent with a currently effectively competitive market, Australian mobile consumers have benefited from decreasing prices for calls, messages and data services while mobile operators continue to invest in technology and quality upgrades.
"This has meant that Australians benefit from high quality mobile networks while paying retail prices below the OECD average."
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