US slams Telstra's ULL prices & operational separation

Stuart Corner
Sunday, 09 April 2006 16:12

IT Policy - Regulation

The US Government, through the US Trade Representative's annual review of telecommunications trade agreements, has expressed its concerns about the adequacy of Telstra's operational separation plans and its moves to charge a nationally-averaged price for the ULL service.
Noting that "Telstra has...unilaterally set a high, nationally averaged rate [for the ULL] arguing that it needs to cross-subsidise rural services with above-cost urban rates", the USTR says: "The likely effect of this new tariff, if Telstra's appeal to DCITA succeeds, will be to preclude competition based on unbundled loops in the geographic areas that competitors want to serve".

And its says: "Australia should consider other mechanisms to address rural service issues, such as expanded use of a competitively-neutral universal service fund."

The USTR says it will: "encourage Australia to adopt reforms concerning the structure and level of pricing for unbundled local loops that do not foreclose competitive entry into the Australian market."

It also intends to monitor DCITA's efforts to ensure that Telstra implements an effective operational separation plan.

On the equally controversial issue of Telstra's demands for relief from access regulations for its planned FTTN network the USTR is silent, and with good reason: the US Government gave similar regulatory relief to US carriers.

Primus Telecom managing director, Greg Wilson, said the report shows that Telstra's attempts to stifle competition and bully the policy makers and regulators have been identified as matters of concern in trade relations. "The report demonstrates that the concerns we and others have raised about Telstra's behaviour have been noted and confirmed as an assault on competition".