It's final: ACCC rejects Telstra's proposed $30 per month ULL charge

Stuart Corner
Monday, 28 August 2006 06:15

IT Policy - Regulation

The ACCC has confirmed its draft decision, issued in June 2006, to reject Telstra's access undertaking proposing a monthly charge of $30 for the unconditioned local loop service.
The rejection has been long expected and comes just days after the ACCC issued a series of interim determinations in access disputes over the ULL service setting a price of $17.70 per month in band 2. The ACCC also set prices of $7.20 for band 1 (CBD) (currently $13) and $34.20 for band 3 (regional).

The main significance of this final decision is that it now opens the door for Telstra to lodge an appeal with the Australian Competition Tribunal. Telstra last took this course of action when the ACCC rejected its proposed line sharing service (LSS) charges, and the ACT upheld the ACCC's decision.

Reviewing that event in a speech last week, ACCC chairman Graeme Samuel said it had provided important indications how the ACT would treat future appeals against the ACCC's access decisions.

 "The Tribunal took the opportunity to clarify a few aspects of how the Tribunal will act in reviewing other access undertakings. In particular, the Tribunal made it very clear that the access provider bears the onus of demonstrating the reasonableness of any access undertaking before the Tribunal, and to do so the access provider must ensure that sufficient evidence is before the [ACCC] when making the initial decision."

This is Telstra's second ULLS monthly charge undertaking to be rejected by the ACCC. In December 2004 Telstra lodged ULLS and line sharing service (LSS) undertakings covering the monthly and connection charges for these services. That undertaking proposed de-averaged prices for the ULLS of: $13 per month $22 per month $40 per month $100 per month in bands 1,2,3, and 4, respectively.

The ACC released its final decision on Telstra's monthly charges undertakings and draft decisions on Telstra's connection and disconnection charges undertakings in December 2005. It rejected both.

Following that draft decision, Telstra withdrew its ULLS connection undertaking on 23 December 2005 and submitted two new undertakings for the monthly charges for ULLS, proposing a rate of $30 per month regardless of location. The first took effect on 1 January 2006 and expires on 30 June 2007. The second takes effect on 1 July 2007 and expires on 30 June 2008. According to the ACCC, apart from the differing time periods these ULLS undertaking are identical. The ACCC issued a draft decision in June rejecting these undertakings.