Telstra to appeal ULLS decision

Stuart Corner
Monday, 28 August 2006 13:12

IT Policy - Regulation

Telstra has lost no time in announcing that it will appeal the ACCC's final decision, announced earlier today,  to reject its proposed $30 per month price for the unconditioned local loop (ULL) access anywhere in Australia, claiming that the ACCC's decision "defied logic".
CEO, Sol Trujillo, said: "The ACCC's decision is inconsistent with the Government's policy of a national uniform retail price and destroys value for Telstra shareholders." He claimed that the decision "does nothing to cover the costs of providing services to Australians living in high-cost areas."

Telstra CFO, John Stanhope, said the decision defied logic and ignored Telstra's real costs and its real and significant annual investments. "Telstra rejects the logic behind ACCC assertions that Telstra's costs for providing wholesale access are declining. The cost of copper used in manufacturing has increased about 75 percent since 2002, the price of fuel has risen by more than 50 percent, the price of labour has gone up by more than 15 percent. Trucks cost more and the costs of trenching are up. To deny these increases in real costs is wrong. Yet the ACCC estimates Telstra's costs have declined by 50 percent over the same period."

Telstra lost its last appeal to the Australian Competition Tribunal, on the ACCC's rejection of proposed charges for its line sharing service, and ACCC chairman, Graeme Samuel said that decision boded well for the Tribunal confirming the ACCC's decision on any future undertakings.

"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."

Telstra's group managing director of public policy & communications, Dr Phil Burgess, noting that Telstra has 21 days to lodge an appeal with the Australian Competition Tribunal, hinted that other means to overturn the ACCC's decision would be tried. "We intend to take full advantage of the legal avenues that are available to challenge this decision."