Industry Forum Inquiry into making a Final Access Determination for the Domestic Transmission Capacity Service

1. Welcome to the DTCS FAD Industry Forum Part of the public inquiry into a final access determination for the domestic transmission capacity service

AGENDA 1.Welcome - Ed Willett 2.Background and approach to pricing the DTCS - Rob Nicholls 3.Route definitions and distance issues - Grahame O'Leary 4.Pricing tail-end DTCS services– Grahame O’Leary 5.Development of the linear regression model - Grahame O'Leary 6.Pricing protected and unprotected services - Grahame O'Leary 7.Non-price terms and conditions of access - Grahame O'Leary 8.Conclusion and next steps - Ed Willett

2. Background Competition and Consumer Act 2010 requirement Access determinations may include price and non-price terms ACCC inquiry into DTCS pricing and domestic benchmarking approach December Information sought from transmission providers April DTCS IAD published June DTCS FAD public inquiry and discussion paper August 2011 – DTCS FAD Industry Forum

3. Route definitions ACCC proposes to adopt the following route definitions: inter-capital routes regional routes metropolitan routes regional tail-end routes and metropolitan tail-end routes

3. Route definitions Inter-capital route - from an ESA in a capital city to an ESA in another capital city Darwin and Hobart to be priced as inter-capital routes Regional route - at least one ESA outside a capital city Metropolitan route – wholly within a capital city Regional tail-end route - wholly within a single ESA outside a capital city Metropolitan tail-end route - wholly within a single ESA inside a capital city

3. Capital city boundaries ACCC proposes to define the boundaries of capital cities as: Adelaide – a 25 km radius from a CBD ESA Brisbane – a 25 km radius from a CBD ESA Canberra – a 15 km radius from a CBD ESA Darwin – a 10 km radius from a CBD ESA Hobart – a 10 km radius from a CBD ESA Melbourne – a 45 km radius from X km east of the CBD Perth – a 30 km radius from a CBD ESA Sydney – a 50 km radius from a CBD ESA No radial boundaries for regional centres

Boundary of Sydney

Boundary of Melbourne

3. Distance issues Distance is measured in different ways: Radial distance Specified regional routes Regional areas DTCS IAD used radial distance

4. Pricing tail-end DTCS services Tail-end services appear to be provided as: part of a bundle of transmission service, or a stand-alone service. DTCS IAD priced tail-end services as stand-alone services.

4. Pricing tail-end DTCS services The ACCC is considering prices for: stand-alone tail-end services metro route prices for tail-end services bundled with metro or inter-capital services regional route prices for tail-end services bundled with regional services

A short break See you at 11.00am

5. The linear regression model Prices set by benchmarking prices of competitive transmission services. Draft regression model on ACCC website Draft regression model estimates annual charge for different: capacities distances network interface, and level of protection.

5. The linear regression model Draft DTCS FAD to include annual charges and connection charges Draft DTCS FAD will include final regression model

6. Pricing protected and unprotected services DTCS should be priced as a protected service DTCS IAD prices are for protected services Draft regression model estimates prices for protected and unprotected DTCS services Final FAD regression model will include prices for protected and unprotected DTCS services

7. Non-price terms and conditions of access The non-price terms in the DTCS IAD cover the following areas: Billing and notification Creditworthiness and security General dispute resolution and procedures Confidentiality provisions Communications with end-users Network modernisation and upgrade provisions Suspension and termination, and Facilities access.

Non-price terms and conditions of access Commencement and expiry DTCS FAD will commence on publication DTCS IAD automatically revoked DTCS FAD expiry 31 March 2014 when DTCS declaration expires

8. Conclusion and next steps Submissions to Discussion Paper close on 29 August ACCC expects a draft DTCS FAD for public comment in third quarter ACCC final DTCS FAD in December 2011.

Thank you for your participation