ACCC rules against Telstra in five ULL disputes

30 Oct 2006

The Australian Competition Consumer Commission (ACCC) has made interim rulings against fixed line incumbent Telstra in five arbitrations regarding the price it charges for unbundled local loop (ULL) access. In August the ACCC ruled that Telstra must lower its standard ULL charge in suburban areas to rival Chime Communications (part of ISP iiNet) from AUD30 (USD23) to AUD17.7 per month. The ACCC has now confirmed the price should be employed in five other access disputes, lodged by Primus Telecom, SingTel Optus and its subsidiary XYZed, PowerTel and its subsidiary Request Broadband. A decision regarding a further ULL dispute lodged by Macquarie Telecom is still pending. The charges will apply until either the interim determinations expire or are revoked, or until a final determination is made in each arbitration.

According to TeleGeography’s GlobalComms Database, the ACCC and Telstra have been engaged in a long running dispute regarding access to the incumbent’s network. In July 2005 the ACCC issued a new draft of price controls for the period 2005-08, which it claimed would ‘promote the long-term interests of consumers by encouraging Telstra to make productivity improvements and pass on the benefits to consumers as lower prices, and by improving the schemes that are intended to assist low-income consumers’. Telstra rejected the proposals, claiming that they were below cost and would have an AUD800 million impact on its business over a five-year period. The incumbent offered up its own set of tariffs in return but these were rejected by the ACCC in December 2005 and the introduction of a new pricing regime is set to be delayed still further as the dispute heads to a court of arbitration. In June 2006 Telstra had its latest proposal to charge rivals a single AUD30 nationwide fee for ULL services rejected by the ACCC as ‘not reasonable’. The following month the ACCC ruled that Telstra must continue to seek approval for ULL prices, starting on 1 August, for a further three years.