The current price ranges from $13 per month in CBDs to over $100 per month in remote areas. Most service are sold at the urban area rate of $22 per month.

The service, which allows access to the basic elements of Telstra's customer access network, is a key input into the development of facilities based competition and is widely used by carriers wanting to install their own DSLAMs and provide broadband services in competition with Telstra.

Telstra has branded the decision "an assault on the basic principle of equal prices for all Australians" that will "allow Telstra's foreign and domestic competitors to raid the savings of Telstra's 1.6 million shareholders".

According to spokeswoman, Liz Jurman, "It is illogical and unfair to allow competitors to piggyback on the Telstra network, cherry pick in profitable metro areas and multiply the profits they send overseas at the expense of Australian shareholders and customers".

ACCC chairman, Graeme Samuel, said: "The ACCC considers that Telstra's proposed monthly charges for the ULLS are not reasonable...The ACCC believes that Telstra's proposed average price is unlikely to promote competition on its merits and likely to heavily distort the use of and investment in telecommunications infrastructure".

"Telstra's prices also adopt a proposed method of cost recovery for ULLS specific costs which has now been rejected by the Australian Competition Tribunal  following Telstra's appeal on its undertaking for the Line Sharing Servic."Further, the ACCC continues to have concerns with Telstra's proposed network cost estimates for the service, which rely on its PIEII cost model.

The model has been subject to further expert scrutiny as part of this assessment which has reinforced these concerns," Samuel said."This is particularly significant in this case, given the likely tendency of Telstra's cost model to overstate costs in rural areas and thereby support a much higher average charge for the service than is likely to be efficient."

The ACCC says that on the material available to the ACCC to date, Telstra has failed to establish that its proposed charges are based on efficient costs."

The decision is presently a draft and is open to submissions from interested parties.