Telstra takes court action over wholesale price cuts

Telstra is appealing against an ACCC decision to cut the wholesale pricing of fixed line services

Telstra has filed an appeal in the Federal Court against a decision of the Australian Competition and Consumer Commission to cut the prices Telstra can charge other telcos that use its copper network to deliver services.

Telstra CEO Andy Penn last month flagged the potential for an appeal.

Fairfax was the first to report the telco had launched court action.

In the face of objections by Telstra, the ACCC cut by 9.4 per cent the wholesale prices the telco can charge for seven fixed line access services.

The ACCC ruling affects pricing of the services from 1 November 2015 through to 30 June 2019 (a decline in real terms over four years of around 12 per cent).

The ACCC issued its final decision last month.

Telstra had argued that it should be allowed to raise its wholesale charges for fixed line services by 7.2 per cent.

"Telstra has today decided to file an appeal with the Federal Court seeking review of the ACCC’s recent fixed line pricing decision," a Telstra spokesperson said in a statement.

"In our view, the decision does not follow the ACCC’s own fixed pricing principles that require Telstra to be given the opportunity to recover from wholesale customers the costs of providing services to them.

"We believe the Court is the appropriate place for us to get clarity on this matter."

"We are comfortable with Telstra seeking judicial review, as is their right," the ACCC's chairperson, Rod Sims, said

"The ACCC's decision on wholesale access prices however, applied the ACCC's fixed principles for the declared fixed line services and took into account the unique circumstance of the transition from Telstra’s copper network to the NBN, as well as a range of other considerations including the long term interests of end users."

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