ACCC issues FAD for price terms of wholesale ADSL service

12 Mar 2013

The Australian Competition and Consumer Commission (ACCC) has published a draft report on making a final access determination (FAD) for the declared wholesale ADSL service, with the regulator setting out proposed price and non-price terms for the service for the period until 30 June 2014. Confirming that it would limit the application of the FAD to fixed line incumbent Telstra, the regulator noted that the telco ‘currently retains dominant positions in the markets for both retail and wholesale fixed-line broadband services despite the deployment of competitive broadband infrastructure in some areas over the past decade’. With the FAD to be applied on a national basis, draft prices have been calculated using the same ‘Building Block’ pricing framework used to estimate prices for the other declared fixed-line services provided over Telstra’s copper network. Using the same pricing approach ensures consistency in the way prices have been set for services that are provided using many of the same infrastructure assets.

An interim access determination (IAD) initially declared the wholesale ADSL service in February 2012, but under the FAD the key price terms for the monthly per-user access charge and the monthly charge for data aggregation (which relates to data usage) have been set as: AUD24.56 (USD25.13) per month per end-user in Zone 1 (predominantly CBD and metropolitan areas); AUD29.81 per month per end-user in Zone 2/3 (predominantly regional and rural areas); and a monthly charge per Aggregating Virtual Circuit or Virtual LAN acquired in connection with wholesale ADSL of AUD36.08 per Mbps.

Meanwhile, the expiry date for the draft FAD has been set in line with the expiry date for the FADs for the other declared fixed line services, with the ACCC claiming that this will allow it to review price and non-price terms for the wholesale ADSL and other declared fixed line services at the same time. Interested parties have until 5 April 2013 to make submissions on the proposals.

Commenting on the development, ACCC chairman Rod Sims said: ‘Setting regulated prices for access to Telstra’s wholesale ADSL service will assist access seekers to offer a range of competitive fixed-line broadband internet services to retail broadband users’, adding: ‘The proposed decision will foster competition in retail fixed-line broadband markets and maintain efficient investment incentives in the transition to the National Broadband Network’.