ACCC issues draft regulated fixed line pricing

Cuts to wholesale line rental and local carriage services

The Australian Competition and Consumer Commission (ACCC) has issued its draft indicative prices for regulated fixed line telecommunications services.

The prices, detailed in Review of 1997 telecommunications access pricing principle report sets out the competition regulator’s proposed approach to access pricing that will apply to the declared fixed line services from January 2011 to 31 December 2014.

According to ACCC chairman, Graeme Samuel, the proposed indicative prices were based on a significant change in the method of pricing, but had the support of the telecommunications industry.

“The ACCC recognises that a four year pricing guidance period will provide a level of certainty which is essential to support commercial negotiations in the industry and to continue to support the competitive supply and rollout of telecommunications services to consumers," Samuel said in a statement.

The most notable changes under the proposed pricing are a reduction in wholesale line rental from $25.57 for homeline, $26.93 businessline to a nationally average price of $20.00. Local carriage services will drop from $0.17 per call to $0.07.

Commenting on the proposed pricing, Optus’ general manager for regulatory affairs, Andrew Sheridan, said the telco welcomed the ACCC’s decision.

“This new approach implicitly reflects the actual costs Telstra will incur to supply services on its copper network as opposed to the past approach which set prices on the unrealistic notion of how much it would cost to build a brand new copper network,” Sheridan said.

The telco remained uncertain as to what real world affect the proposal would have on wholesale pricing, particularly on Telstra’s ULL and PSTN networks.

“Optus will examine the detailed application of the ACCC’s new methodology to understand why these price changes have not eventuated,” he said.

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