Competition Tribunal throws out Vodafone pricing

Stuart Corner
Thursday, 18 January 2007 08:31

IT Industry - Strategy

The decision is the latest in a string of victories for the ACCC against carriers that have appealed its decisions to the ACCC.

"It is clear from the Tribunal's judgment that carriers are coming to the ACCC with proposals that are not justified by sound analysis and are destined to be found unreasonable by both the ACCC and the Tribunal," ACCC chairman, Graeme Samuel said.

"After 10 years of telecommunications access regulation, industry should be sufficiently familiar with the sort of things it needs to do to satisfy the ACCC, and the Tribunal, that an undertaking reasonably balances the interests of the average communications consumer with industry's desire for greater investment and regulatory certainty."

He said this was the third decision in the last nine months where the Tribunal had agreed with the ACCC that a carrier had failed to put forward an undertaking based on robust reasoning. "Since March last year, the Tribunal has affirmed the ACCC's decision to reject Telstra's line sharing service undertaking, finding that Telstra's cost recovery approach was unreasonable, and agreed with the ACCC that Optus' MTAS undertaking was unreasonable on a number of grounds."

These outcomes bode well for another important appeal currently before the ACT. Telstra has appealed the ACCC's decision to reject its proposed $30 per month geographically de-averaged price for the Unconditioned Local Loop (ULL) service, required by all service providers offering ADSL broadband from their own DSLAMs. The ACCC believes the price should reflect population density which would see the bulk of lines, which are in urban areas available for around half this cost: $7.20 in the inner city and $17.20 in the suburbs.