Govt calls for review of telco fixed-line price caps

Submissions close at 5pm on 18 November this year

The communications minister, Senator Stephen Conroy, has released a discussion paper for the review of telecommunications retail price controls.

Price caps for fixed-line telco services are regulated under the Telecommunications (Consumer Protection and Service Standards) Act 1999, which currently only apply to Telstra. However, this arrangement will expire on 30 June, 2012.

The act covers only some Telstra fixed-line services, which is separated into four ‘baskets’. These baskets contain local and international calls, trunk calls and line rentals; basic residential line rentals; basic business and charity line rentals; or connection services.

Under the arrangement, price increases are allowed in accordance with CPI movements.

According to the discussion paper, reasons for the review were four-fold, including the announcement of the National Broadband Network (NBN) in 2009 and the establishment of NBN Co, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010 enabling for the separation of Telstra, which was passed in November 2010, and the Definitive Agreements between Telstra and NBN Co in June.

Proposed reforms to the Universal Service Obligation (USO) for the transition to the NBN environment, including the formation of the Telecommunications Universal Service Management Agency (TUSMA), also had an impact.

“Price controls are a key telecommunications consumer safeguard that aim to ensure that efficiency improvements are passed through to consumers in the form of lower prices for telecommunications services in markets where competition is not yet fully developed,” Conroy said in a statement.

“They also protect the interests of low-income and regional users of telecommunications services.

“Following consultation on the issues raised in the discussion paper, the review’s findings will inform government consideration of the future of telecommunications retail pricing policy.”

The paper is online, along with information about the review and how to make submissions which closes at 5pm on 18 November 2011.

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Tags governmentNBNTelstraSenator Stephen ConroyNational Broadband Network (NBN)pricingtelcosdiscussion paperprice caps

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