Operators give ACCC's preferred MTAS option short shrift

Stuart Corner
Friday, 05 August 2011 13:28

IT Policy - Regulation

The ACCC's preferred option for pricing the mobile terminating access service (MTAS) is a bill and keep (BAK) model, but none of the mobile network operators supports this.

The ACCC has just released the operators', and others', submissions to the MTAS discussion paper, issued in June, in which it set out a number of options for future regulation of MTAS.

Under its favoured bill and keep model each mobile operator would terminate incoming calls at no charge to the originating carrier. The ACCC said that this would "reduce frictional and transactional costs associated with collecting, reconciling and billing the large volume of call detail records."

The ACCC's biggest concern with the present regime is failed pass-through: the price reductions it has pushed through over the past few years not being reflected in reduced prices for calling mobiles from fixed phones. Other options canvassed in the discussion paper to address this problem include a requirement that any further reduction in the MTAS rate be linked to a full or partial pass-through obligation and determining the MTAS rate using a retail minus model: deducting other costs from the price charged for fixed to mobile calls.

Telstra favours neither this nor a BAK model, but does argue for a reduction in the regulated MTAS rate from its current nine cents per minute to about six cents, with costs estimated using a total service long run incremental cost plus (TSLRIC+) model - a model that the ACCC wants to abandon for pricing fixed line services.

Telstra says in its submission "TSLRIC+ prices for MTAS will best promote the long-term interests of end-users (LTIE), as it is a cost based price methodology that allows a return on, and return of, efficiently invested capital and the recovery of efficient common costs."

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