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Telstra escapes ACCC connection fee regulations

The consumer watchdog said in its draft decision on non-price terms for regulated services that it does not have to extend the scope of its connection charge regulations due to Telstra's ability to manage external contracts.
Written by Aimee Chanthadavong, Contributor

The Australian Competition and Consumer Commission (ACCC) said in its draft decision on non-price terms for regulated services, including proposed connection charges for fixed-line services, that it will not be extending the scope of its connection charge regulations.

The consumer watchdog said this is mainly because most of the draft connection charges are lower than current charges, reflecting Telstra's ability to achieve efficiency in the way it manages external contracts undertaking connection work.

Last April, the ACCC extended its deal to use Telstra's copper network to regulate wholesale services supplied by the telco until 2019. The idea was to enable retail telecommunications service providers to continue to use Telstra's copper network and other fixed-line infrastructure to provide a range of retail fixed-line telephone and broadband services to Australian consumers.

The draft decision is part of an ACCC inquiry examining non-price terms, including commercial and operation matters, such as billing and notification, general dispute resolution processes, and some ordering and provisioning processes for certain regulated services.

The consumer watchdog also noted that there was no significant evidence of concerns to justify a more comprehensive approach to setting regulated non-price terms of access.

However, ACCC commissioner Cristina Cifuentes said the commissioner is concerned that some commercially negotiated access agreements may include clauses that could entirely exclude future regulated terms during the life of the agreement.

The ACCC added that access seekers should have the choice to opt in for new or varied regulatory terms to promote competitive outcomes and the long-term interests of end users as part of their access agreements.

"We are currently working constructively with an access provider to provide for terms that will give an opportunity to access seekers to seek regulated terms either at the end of a two year contract period or with six months' notice, along with specific commitments to negotiate in good faith in relation to regulated terms," Cifuentes said.

As part of the inquiry, the ACCC is seeking submissions on its draft decision on non-price terms for the regulated services and connection charges for fixed-line services by April 17, 2015. The consultation is expected to help the ACCC's inquiry into determining regulated prices and non-price terms that will apply when access providers and access seekers cannot reach agreement through commercial negotiations.

The ACCC expects to make a final decision on non-price terms for the regulated services and on connection charges by late June 2015.

The inquiry on regulated services is in addition to the ACCC's ongoing consultation on the primary prices for fixed-line services. The ACCC has already commenced consultation, and said it expects to release a draft decision on these services later this year.

Earlier this month, the ACCC warned that should the draft decision be adopted, it plans to cut Telstra's wholesale pricing across seven fixed-line wholesale services by 0.7 percent, which should see a decline in real terms for retailers of 12 percent over the next four years.

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