In the first sign of regulatory rollback in the face of increased competition in fixed networks, the ACCC has issued a draft decision to grant Telstra an exemption from regulation of two wholesale services in metropolitan exchanges serving a total of four million customer lines.

The ACCC has said it plans to exempt Telstra from the regulation of wholesale line rental and local carriage services (local call resale) because of increased ULL-based competition.

The exemptions would apply in 229 metropolitan exchanges where each serves at least 14,000 customers, or where there are three or more competitors with DSLAM equipment in the exchange.

Executive Director of Regulatory Affairs, Tony Warren, cautiously welcomed the news of the draft decision.

"This is an encouraging sign that the ACCC is starting to consider regulatory changes that finally recognise the growth in infrastructure-based competition," Tony Warren.

"However they didn't come to this finding on their own, and it has only been after extensive submissions and supporting evidence of increased competition, compiled by Telstra, that we have arrived at this day.

"These submissions are due to much hard work by employees across Regulatory, Legal, Telstra Wholesale and Telstra Networks and Operations. The evidence of increased competition is so compelling that it would be hard to see how the ACCC could come to any other conclusion," Tony said.

The ACCC is seeking submissions on its draft decision by May 27 before making a final decision. The ACCC wants the exemptions to come into effect 12 months after a final exemption decision, because it believes it is necessary to give access seekers time to make alternative arrangements if they wish.

Importantly, in its press release the ACCC also confirmed that ULL is a transitory technology, and that ULL arrangements should not prevent a move to a fibre-to-the-node network.