ACCC rejects Telstra pricing again

Summary:Australia's competition regulator has again issued a final decision to reject what it described as an "unreasonable" Telstra proposal to charge other telcos $30 per month to use its copper loop for certain broadband services in metro areas.

Australia's competition regulator has again issued a final decision to reject what it described as an "unreasonable" Telstra proposal to charge other telcos $30 per month to use its copper loop for certain broadband services in metro areas.

Telstra has repeatedly submitted undertakings that sought to recover an amount significantly above efficient costs

ACCC chair Graeme Samuel

The so-called Unbundled Local Loop Service (ULLS) is used by other broadband providers such as Optus, iiNet, Internode and more to provide ADSL broadband and similar services, without the provider needing to buy an associated landline service.

"Following an extensive assessment of Telstra's undertaking, including Telstra's own cost model, the Australian Competition and Consumer Commission (ACCC) is not satisfied the $30 charge for metropolitan areas is reasonable," the regulator's chairman Graeme Samuel said in a statement.

"The ACCC believes that Telstra's proposed price is unlikely to promote competition in the broadband and telephony markets. It may also discourage investment in telecommunications infrastructure." The ACCC noted Telstra's $30 per month proposal was "significantly above" estimates derived from benchmarking against other countries.

The regulator pointed out Telstra had submitted four applications regarding the ULLS service since 2004, including the one rejected last night, one being withdrawn and three rejected, with the Australian Competition Tribunal backing the ACCC in two earlier appeals by Telstra.

"Telstra has repeatedly submitted undertakings that sought to recover an amount significantly above efficient costs," the regulator said in the statement. Telstra spokespeople did not immediately respond to a request for comment.

Topics: Telcos, Government, Government : AU, Telstra

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