ACCC outlines plan for Telstra wholesale ADSL pricing

Prepares for final access determination

The Australian Competition and Consumer Commission has issued a draft report on a final access determination for Telstra's wholesale ADSL service that will in part govern pricing for organisations seeking access to the telco's copper network to deliver broadband services.

In the absence of other agreements between Telstra and access seekers, the FAD will provide terms for the parties to fall back on when negotiating access to the network.

The FAD will set out pricing and other conditions that will apply until 30 June 2014.

“Setting regulated prices for access to Telstra’s wholesale ADSL service will assist access seekers to offer a range of competitive fixed-line broadband Internet services to retail broadband users,” ACCC chairperson Rod Sims said in a statement.

The proposed FAD uses cost-based pricing, with the draft report stating that the ACCC "considers that estimating wholesale ADSL prices using a cost-based approach will best promote the long-term interests of end-users, relative to other pricing methodologies such as the retail minus retail cost approach."

“The proposed decision will foster competition in retail fixed-line broadband markets and maintain efficient investment incentives in the transition to the National Broadband Network,” Sims said.

The prices in the draft FAD are slightly lower than the interim wholesale pricing put in place early last year.

According to the ACCC, the prices in the draft FAD and the Interim Access Determination issued in February last year are below the prices that most organisations were paying Telstra before the IAD declaration.

The ACCC has called for submissions on the draft report and FAD to be submitted by 5 April. The inquiry has a deadline of 13 August, but the organisation indicated it expects to declare an FAD before then.

Details of the ACCC's draft decision are available from the organisation's website.

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