ACCC rejects Telstra's proposed line sharing fee

ACCC rejects Telstra's proposed line sharing fee

Summary: The Australian Competition and Consumer Commission (ACCC) has rejected Telstra's proposed line sharing service monthly access charge of AU$15, proposing instead a AU$7 to AU$9 charge per service.The ACCC said the Telstra fee was "well above efficient costs.

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The Australian Competition and Consumer Commission (ACCC) has rejected Telstra's proposed line sharing service monthly access charge of AU$15, proposing instead a AU$7 to AU$9 charge per service.

The ACCC said the Telstra fee was "well above efficient costs."

The LSS is a service that enables two carriers to provide separate services over a single metallic pair or 'line'. It allows Telstra to supply basic telephone services to a consumer while also enabling its competitors to provide high speed broadband services, such as ADSL, to the customer on the same line.

ACCC chairman, Graeme Samuel, said that it was the ACCC's final view that the Telstra's LSS undertaking should be rejected since it was "not reasonable".

"The ACCC has formed a view that the monthly charge of AU$15 per service is not reasonable as it is significantly higher than what would be justified by the efficient costs of supplying the service. Such a price will not promote competition, as it is unlikely to encourage service providers to invest in their own facilities to provide broadband services. It is also unlikely to encourage efficient use and investment in infrastructure by Telstra."

In September 2003, Telstra lodged an access undertaking with the ACCC specifying the terms and conditions upon which it undertakes to meet its standard access obligations to supply the LSS.

The terms and conditions relate to the pricing of the LSS but not to other matters of supply. The undertakings include service descriptions and a price list specifying Telstra's proposed charges for the service outlined in the service description.

The ACCC released a discussion paper on Telstra's LSS access undertaking in December 2003 and consulted interested parties to express views and information on the issue.

The ACCC also sought further information from Telstra on costs and other aspects of the supply of the service to better inform its assessment.

Topics: Telcos, Broadband, Government AU, Telstra

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3 comments
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  • Telstra planning to overcharge!?!?! Surely not!
    anonymous
  • It should be $5 or less this is just another wall tel$tra is trying to put up to snuff out any competition from competiters DSLAM's which other ISP's are being forced to install while tsl$tra sits back and continues to manage a clear monolopy over the broadband market in Australia.
    Something which the government is failing to act apon which stuck bewteen privatisation and rolling out an optic fibre network which would cause tel$tra to be basically worth nothing.
    anonymous
  • Even the $7 to $9 cost for the local loop access that the ACCC belive is a fair cost would have been derived from information that was provided by Telstra.

    Are Telstra suggesting that even though they have increased voice line rental from an average of $11 to an average of $27 in the last three years that they are still not making enough ?.

    The fact that Telstra's recent profit growth has largely been driven by line rental should answer that.
    anonymous