Telstra appeals ACCC's $30 ULLS rejection

Telstra appeals ACCC's $30 ULLS rejection

Summary: Telstra today launched an appeal in Federal Court to the Australian Competition and Consumer Commission's April rejection of its $30 per month wholesale undertaking for Unconditional Local Loop Services over the telco's copper network.

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Telstra today launched an appeal in Federal Court to the Australian Competition and Consumer Commission's (ACCC) April rejection of its $30 per month wholesale undertaking for Unconditional Local Loop Services (ULLS) over the telco's copper network.

The appeal follows the Competition Tribunal's decision to turn down Telstra's challenge to raise prices for metropolitan area Unbundled Local Loop Services above the current rate of $14.30. ULLS refers to access to Telstra's copper, which enables a competitor to provide ADSL broadband and similar services, without the provider needing to buy an associated landline service.

Despite Telstra's warmer relations with the Federal Government under new chief David Thodey, it has stood firm by its claim that wholesale ULLS prices in metropolitan areas are below where they should be.

At the telco's recent earnings announcement Thodey told media he would like to see an increased price for ULLS. The current rate of $14.30 is set to increase to $16.00 per month in "Band 2" areas, which is the area Telstra has disputed in its appeal. According to the ACCC, this zone covers 70 per cent of the Australian population but 0.2 per cent of the land.

The outcome of the appeal could be critical for the telco and competing internet service providers. If Telstra wins its appeal, the ACCC, which rejected the $30 proposed fee on the grounds it would limit competition, would have to accept Telstra's battle to boost metropolitan wholesale access prices.

Although unrelated to Telstra's appeal, the regulator late last week issued new draft pricing principles for wholesale access, and has suggested a two-zone price schedule rather than the previous four-zone approach. The currently disputed Band 2 areas would under the new pricing regime become Zone A. The ACCC has proposed 2009-10 Zone A pricing of $16.90, rising to $20 in 2010-11 and $23.60 in 2011-12.

"We aim to give a direction to industry about the level of price the ACCC considers is a reasonable starting point for negotiations between Telstra and its wholesale customers over the next three years," the ACCC's chairman Graeme Samuel said in a statement.

An outcome is not expected until October, according to industry sources.

Topics: Telcos, Government, Government AU, Telstra

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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Talkback

14 comments
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  • $30 is ridiculous

    I have my Telstra budget phone service for $20 per month. According to Telstras ULL argument they are undercharging themselves a considerable amount for the service they themsleves supply.
    The agreed ULL price should be a portion below what Telstra is able to sell its own phone service (which includes copper rental). So $16 seems like a fair charge.
    anonymous
  • Awake to the freeloaders.

    Every Australian deserves their day in court if they consider they have a situation to protest. That's the way we do things in Australia.

    Opponents, who desire the destruction of Telstra (for their own financial advancement) call for the break-up of Telstra and confiscation of Telstra plant and equipment.

    Australians (and hopefully the Australian Government) are now awake to this shameful charade and will allow the Government to regulate, the legal system to operate and Telstra to compete in the interests of all Australians.
    anonymous
  • re: Awake to the freeloaders.

    The only way Telstra will 'compete' is if the company is actually broken into wholesale and retail. As mentioned above, Telstra budget phone is $10 less than their current 'valuation' of ULL services. All the while a single company has a monopoly over the distribution, competition is meaningless. Now I know you are a company shill, but I would have thought that even you could see the flaws in your arguments...
    anonymous
  • True Value

    Mate...you can have True value ony when you have "True Competition".

    The sooner these "freeloaders invest & compete instead of running off to game the regulater the better. Rather thanbleme Telstra they should get their own house in order!!
    anonymous
  • value

    Please explain to me what true value Telstra offers to charge the exorbitant prices that they do?

    For my money, a company like iiNet is offering value and excellent customer service. They have invested in their own network (and certainly have their house in order) and have made great customer service a priority.

    As a result, they are growing customer numbers at a very high rate. I estimate I will save over $1,000 a year by ditching Telstra altogether.

    That's true value mate...
    anonymous
  • re: Load of Bollocks

    I agree. I left some time ago to avoid the price gouging at that time for a land line and went to Exetel. Problem is the Telstra still control the copper. I have a copper fault now for 5 weeks and My ISP is being told another 3-7 weeks till Telstra will even look at fixing the issue. So unfortunately they have found another way to jack up my prices. Also ask a person that is trying to churn from a new landline to Naked. Telstra have invented a $100 charge for that. Shame.
    anonymous
  • Telstra are the freeloaders

    Mr. Lawrence, I'm still awaiting that "research" you promised, lol? But in case you have forgotten the question you are researching, as you seem to forget everything but Telstra yeah, yeah - go my wife's shares...Is TelstraClear, "leeching" (your word) off Telecom NZ -YES or NO? It's not a trick question.

    Yet once again sans research/fact, you keep the Telstra bullsh!t, shareytales flowing - you just can't help yourself, can you? But look here, from the timing is everything files, Mr. Lawrence!

    Optus just launched the D3 satellite to service Australia and NZ. So along with Optus' other investments in fixed/HFC and mobile, here's even more "investing to compete, just as you ask for - open/true competition".

    So even though YOU refuse to see it and Telstra refuse to recognise it, investment from Telstra's competitors is happening. But you keep telling us otherwise, because NWAT said, and because it will help those shares, won"t it, major shareholder's spouse?

    Now of course instead of saying RS has brought up an interesting point you will of course accuse me of disparaging the icon and supporting Optus, which I am not. I am just showing that you Mr. Lawrence are full of ****, sorry but it is so.

    But ironically, humorously and from the hypocrite files, guess who is going to be one of the big users/wholesalers (leeches) of Optus' new D3 satellite? Foxtel! And who own 50% of Foxtel? Telstra, lol!

    So apart from (sans research, lol) "leeching" off Telecom in NZ, Telstra are again going to be "leeching" off Optus' D3, both here and possibly in NZ again.

    Why don't Telstra simply "invest to compete" for "true and open competition, like Optus are", instead of "leeching", Mr. Lawrence?

    Instead of continually depending on their "ancient, inherited fixed line monopoly" and forever going to court to have the "access price of this ancient inherited fixed line monopoly, increased". They have shown by NextG that they can do it, but they prefer the easy old "dirty" profits, eh?

    So what a "shameful Telstra charade", I'm sure one who promotes true competition like you, would agree, eh Mr. Lawrence?
    anonymous
  • Not fair?

    @RS, it may be a bit unfair of you to suggest that "Sydney L" should answer your very relevant questions.

    If "Sydney" isn't a creation of the vast Telstra spin department, he does seem to sound like that.

    So is it expecting too much to look for a degree of objective intelligence from that direction?
    anonymous
  • Yes I guess so...

    Perhaps you're right Anon.

    But I do enjoy it so, being a "disparaging demoniser", lol!
    anonymous
  • Telstra Land Lines

    I have lost my previous message in the system, but feel it important enought to try to repeat it.

    Telstra's new claim to increased prices for end line ULL's, is charging the end line consumer twice for a poorly maintained copper system.

    Any engineer worth his salt, can demonstrate that a correctly installed copper line, properly joined, and terminated, with a varying signal ( data ) on the line, will far outlast a DC line used intermittently for voice conversations.

    Ergo ULL's can only maintain the lines in better condition than DC lines.

    Ergo, Telstra only wants to charge the end line consumer Fantastic prices for what??, only to line theirs, and the shareholders profits.

    Before anybody wants to dispute the claims in this article, let them first go back to their mathematics, and 50 years practical experience.

    The Krone System relies on tensions in the copper cable, which only last about 10 to 12 years, on DC.

    The wire wraps require a little more strength in the wrist, than tradespersons have been able to use for the last 12 to 15 years, on DC.

    I await any Genuine Formulae to prove me wrong, so that i can pick their formula to pieces.
    anonymous
  • $30, are they kidding?!

    Are they actually expecting anyone to believe this price gouge or is this telstra trying to be funny and were just taking it to seriously, that means we'll be paying more than $30 a month just for a budget service, wtf...

    telstra is charging 24.95 for there ADSL basic, gee thats nice of them, everyone, look telstra execs are actually paying $5 a month for you to have adsl, there losing money! :O

    "well its there infastructure they can charge what they like" well no actually, they cant, the government is to intervene in such situations when a capitalist economy crops up unfair situations (as it does naturally, hence why we tax high earners more to give in social security, to stop a cyclical exponential rich poor gap) so good on you ACCC your doing exactly what governements are around to do
    anonymous
  • Monopoly Hungry Scumbags

    The legal system is operating well - just a pity that those monopoly hungry inbreds at Telstra will not abide by the umpires decision.
    I think the ACCC has got the current ULL priving totally wrong - it should be sub $10 p.m..
    But the horrible and disgusting pressure that Telstra has placed on it ha slead to the increase.

    This just means that customers will pay more for their services.
    Once again - you disgust me Telstra - why have thay any customers left ????? I just don't understand ?????
    anonymous
  • Hang on ACCC - annual 18% increases?

    What's going on here? The ACCC is proposing increasing the current $14.30 every year, first to $16.90, then $20, then $23.60.

    This is an 18% increase each year, compounding to 65% higher in three years time!

    More information, please.
    anonymous
  • Telstra a dogs

    Could somone please explain how telstra thinks it costs $30 a month just for the line???

    Please things should get cheaper as time goes on not more expense espially what is fast becoming a Esential just like electricity and water??

    Thats right they cant becuase it is a over inflated cost.

    and the want more.....

    ITS TIME TO RISE UP PEOPLE :) lol.
    anonymous