ACCC issues updated draft decision on fixed line service pricing

30 Jun 2015

The Australian Competition and Consumer Commission (ACCC) has published an updated draft decision related to the prices that alternative telecoms operators pay fixed line incumbent Telstra to use the latter’s copper network to provide services to consumers. In announcing the development, the regulator noted that its latest ruling supplements an initial draft decision it released in March 2015 with a view to addressing ‘outstanding issues’. As per the ACCC’s further draft decision a one-off uniform fall in access prices of 9.6% will be required for all seven access services, those being: unconditioned local loop service, line sharing service, wholesale line rental, local carriage service, fixed originating access service, fixed terminating access service and wholesale asymmetric digital subscriber line. As previously reported by CommsUpdate, in its initial March 2015 draft ruling the ACCC had proposed a one-off uniform cut in access prices of just 0.7%. These new prices will apply from 1 October 2015 until 30 June 2019.

Unveiling the updated pricing plans, the ACCC said it believed the most important issue relating to the draft decision was linked to the effect of the transition from Telstra’s fixed line network to the National Broadband Network (NBN). Commenting on this matter, the regulator’s chairman Rod Sims was cited as saying: ‘Users of Telstra’s network should not pay the higher costs that result from fewer customers as NBN migration occurs. If there is no adjustment for these higher costs then customers who have not been migrated to the NBN will pay significantly higher prices for copper based services. Eventually these prices would reach absurd levels for the unlucky last copper customers.’ Further, the executive added: ‘Our draft decision is that assets that become redundant as a result of migration will be removed from the asset base. Also, users of the copper network will not pay the higher prices that result from the loss of scale efficiencies as the number of services remaining on the copper network falls.’

With the ACCC having now invited stakeholder views on its latest draft decision on the primary price terms to be included in the final access determinations for the next regulatory period, it has set a deadline of 17 July 2015 for submissions. A final decision meanwhile is expected by the end of September 2015.