Cut interconnect charges, commission tells Telstra

The Australian Competition and Consumer Commission (ACCC) has recommended Telstra reduce its interconnection charges to 1.6 cents per minute.

The commission released a discussion paper late Tuesday afternoon, which suggested Telstra now has the scope to reduce the charges imposed on other carriers using its fixed network as a result of changes to price caps.

On July 1 this year the federal government introduced new retail price caps that provide Telstra with greater scope for line rentals and call charges.

ACCC officials said Telstra's capacity to raise line rents to equal line costs was constrained by government price cap regulation. This meant there was a need for carriers to contribute to funding the access deficit in their interconnection payments, officials said.

In its preliminary analysis the ACCC suggests that interconnection charges can be reduced to between 1.4 and 1.8 cents per minute. Under previous price cap arrangements the ACCC estimated Telstra could reduce its charges to about 2 cents per minute. Telstra proposed call charges of around 4.73 cents per minute.

The ACCC said it will only make a final decision on the issue in assessing a new undertaking submitted by Telstra or in arbitration.

Public comment on the discussion paper will be accepted by the ACCC until September 24.

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