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ACCC and Telstra want to maintain stable price structure for copper services

They believe a similar price structure will provide a more stable environment for access seekers as customers migrate to the NBN.
Written by Campbell Kwan, Contributor

Telcos that use Telstra's copper network for their fixed line and ADSL services are unlikely to get a price cut, with the Australian Competition and Consumer Commission (ACCC) taking the initial position of wanting to maintain the current regulated pricing levels.

The ACCC is the regulatory body for determining the terms of access for Telstra's copper network by telcos. This is executed through final access determinations (FADs), which specify how an access provider is to comply with their access obligations and sets out the price and non-price terms and conditions (NPTCs) of access to these services.

In February 2017, the ACCC said it would continue to regulate the ADSL services for five years, and confirmed in November 2018 that it would do the same for six fixed-line services until 2024.

With the FADS for the six fixed line services and wholesale ADSL set to expire in June 2019, the ACCC commenced a public inquiry in December into making new FADs for the upcoming new declarations.

"In light of the influences affecting the cost of providing services since the determination of the current FAD, the ACCC is interested in views on whether there is justification for a continuation of fixed line and wholesale ADSL prices at their current levels," the consumer watchdog said at the time.

In the ACCC's consultation paper, released on Friday, it supported the continued use of the already-existing NPTCs as there were no widespread problems in the current FADS.

Meanwhile for the pricing of Telstra's copper services, the ACCC said it leaned towards maintaining a similar price structure to provide stability for the new FADs.

"Stability in prices (and price relativities) for declared services will maintain efficient use of declared services investment in fixed line assets by Telstra and provide a more stable environment for access seekers as customers migrate to the NBN," the ACCC said.

This position taken by the ACCC is the same as the one it expressed for its 2015 FAD decision -- that significant changes in the way services are provided over the fixed line network may lead to inefficient use of the services.

Telstra, who provided preliminary submissions in December along with three others, expressed the same views as the ACCC.

"Fixed Line Service Model (FLSM) used to derive prices as part of the next FAD would be a complex and time consuming exercise. According to Telstra a full update of the model could not be completed before the current FAD expires in June 2019," according to the consultation paper.


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