ACCC finds Telstra complying with price controls

Stuart Corner
Tuesday, 28 March 2006 17:06

IT Policy - Regulation

The Australian Competition and Consumer Commission has issued its annual assessment of Telstra's compliance with its retail price control arrangements, saying it is satisfied that Telstra has adequately complied with its price control arrangements.

Price controls on Telstra were first introduced in 1989. Under the arrangements, the ACCC is responsible for developing a methodology by which to measure changes in Telstra's prices assessing the accuracy and completeness of Telstra's report and providing an annual report to the Minister on Telstra's compliance.

The price control arrangements that applied in 2004-05 included separate price caps on three baskets of services: local calls, trunk calls and international calls with a cap of CPI - 4.5 percent per annum; line rentals with a cap of CPI + 4 percent per annum; and connection services with a cap of CPI – 0 percent annum.

These caps apply to the weighted average prices of the services in the baskets as supplied to all Telstra's retail customers.

The price control arrangements also require untimed local call charges to be broadly similar for both metropolitan and non-metropolitan consumers and for Telstra to comply with a number of other specific pricing and notification requirements.