Telstra appeals ACCC's $30 ULLS rejection
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.