Competition watchdog recommends tight caps on Telstra pricing

The competition watchdog released the draft version of its review yesterday, asking for submissions from interested parties before it sends its final version to the Minister for Communications, Information Technology and the Arts by 31 January.

According to the ACCC, the new price control arrangements will apply for three years following the current regulations' expiry on the 30th of June 2005.

Chairman of the ACCC, Graeme Samuel, said that although the current price controls have "provided benefits" for many consumers, "the future price controls could do much to promote the long-term interests of low-income consumers and of consumers more generally".

The ACCC said it will recommend that line rental, local calls, domestic and international long-distance and fixed-to-mobile calls are subject to a price cap of approximately CPI (consumer price index) 5 per cent and that connection services be subject to a price cap of CPI.

The review recommends that local calls remain capped at 22 cents, payphone calls remain capped at 40 cents, and dial-up Internet should be capped at 22 cents per local call.

The group said it will also consider if business services, national long-distance calls and international calls should be excluded from price-cap regulation.

The ACCC also recommends that measures be introduced to "encourage more efficient investment in telecommunications infrastructure", in the document and that directory assistance charges remain under ministerial consideration.

It also said that "direct government assistance" should be considered as a more efficient way of improving access for regional and rural consumers".

The closing date for public submissions for the review is Friday 3 December.