Watchdog's decision to freeze Telstra fees angers competitors
The Age
Friday December 4, 2009
THE competition watchdog has enraged Telstra's competitors by freezing the prices they pay the telecommunications company for access to millions of home phone lines.The Australian Competition and Consumer Commission said it would roll the prices over to December 31, 2010, despite revealing a proposed new pricing model in August. It will also review how the prices are set.That model raised the price Telstra could charge its rivals for access to the "unbundled local loop" or ULL services €” where they install equipment in Telstra exchanges and effectively take over the line €” from $16 today to $23.60 by June 2012.Although yesterday's decision by the ACCC means Telstra's competitors will not be slugged with those higher charges, the other telcos are furious because they say the ACCC indicated in the past that prices should fall."It has in the past two years repeatedly said that it believes Telstra's prices for basic wholesale services are too high and that it €” the commission €” has contributed to this by not basing its wholesale price guidance on what it costs Telstra to provide the services," said David Forman, of the Competitive Carriers Coalition."Yet instead of this, the ACCC today announced a 'do nothing' approach for another year. The commission's inaction today is nothing less than an abrogation of its basic responsibilities to consumers and competitors. It should be ashamed."Telstra yesterday hailed the decision. The company's head of regulatory affairs, Jane van Beelen, said: "This is a sensible decision. It enables the important next steps to achieve regulatory certainty in the longer term."In a rare moment of rapprochement, Optus government affairs boss Maha Krishnapillai also welcomed the decision, saying the pricing review gave the opportunity to "address Telstra's unjustified push for higher access prices".The decision means Telstra's competitors cannot plan more than a year ahead, which is even more significant as the Federal Government begins to build its $43 billion national broadband network (NBN).Industry sources suggested yesterday that the ACCC had deferred the decision because any new price guidelines would allow the calculation of the copper network's value. This would harm the Government's position as it haggles with Telstra over how much the network is worth.The Federal Government will today announce that Leighton's NextGen arm has won the $250 million tender to build backhaul, the spine of a broadband network, to create competition in rural areas where Telstra is the only provider. BusinessDay also believes that construction company John Holland has won a tender worth about $8 million to build NBN backhaul on the east coast of Tasmania.
© 2009 The Age
