ACCC announces one-off uniform 9.4% reduction in fixed line access service charges

9 Oct 2015

A final decision relating to the prices that alternative operators pay to provide services over Telstra’s copper network has been published by the Australian Competition and Consumer Commission (ACCC). The regulator has revealed that there will be a one-off uniform reduction of 9.4% in access prices from current levels, with this applying to the seven fixed line access services: unconditioned local loop service (ULLS), line sharing service (LSS), wholesale line rental (WLR), local carriage service (LCS), fixed originating access service (FOAS), fixed terminating access service (FTAS), and wholesale ADSL service. The ACCC’s final decision also covers connection and disconnection charges and a decision to not exempt the central business district (CBD) areas from coverage under the final access determinations.

With the new prices to apply from 1 November 2015 and remain valid until 30 June 2019, the cost of ULLS in Bands 1, 2 and 3 will fall from AUD16.21 (USD11.67) per month to AUD14.68 per month, while in Band 4 the charge will be reduced from AUD48.19 to AUD43.65. WLR will drop to AUD20.69 per month (down from AUD22.84), with LSS charged at a monthly AUD1.63 (AUD1.80). LCS will cost AUD0.089 per call (down from AUD0.095), and FOAS and FTAS will both be billed at AUD0.0086 per minute (AUD0.0095). Wholesale ADSL connections in Zone 1 will drop to AUD22.14 per port per month, compared to AUD24.44 at present, while in Zone 2/3 the service will cost AUD26.87 per port per month, down from AUD29.66.

ACCC chairman Rod Sims commented: ‘The ACCC has dealt with a number of complex issues during this inquiry, including the unique circumstances of the transition from Telstra’s copper network to the National Broadband Network [NBN].’ In terms of factors affecting the decision, the regulator cited lower costs of the copper network; a ‘very significant’ decline in the cost of capital since 2011; low inflation over the 2015 financial year; and new forecasts from NBN Co on its rollout schedule for the NBN. Additionally, upward pressure on prices resulted from the ACCC’s decision to adopt a fully allocated cost model in combination with declining demand for fixed line services due to substitution of mobile for fixed line services and the migration to the NBN.