Telstra picks a fight over copper pricing

In December, Telstra made two submissions to the Australian Competition and Consumer Commission (ACCC) regarding that pricing scheme, which the ACCC today finally rejected after issuing a draft rejection in June.

Telstra had proposed a flat AU$30 per month charge per subscriber for rivals regardless of the location in which the so-called unbundled local loop (ULL) services were being used, but the ACCC said it did not support such an "averaged" pricing scheme.

"We will appeal this decision to the Australian Competition Tribunal as a matter of urgency," said Telstra chief executive Sol Trujillo in a statement issued this afternoon.

The Telstra supremo added while today's judgement confirmed a reduction in prices paid by Telstra's rivals in metro areas, it did nothing to cover Telstra's costs of providing services to people living in high-cost areas such as much of regional Australia.

"The ACCC's decision is inconsistent with the government's policy of a national uniform retail price," said Trujillo.

In the statement, Telstra chief financial officer John Stanhope outlined in detail Telstra's problems with the ACCC's rejection logic, citing increases in copper manufacturing, fuel, labour, transport and trench digging costs.

"However, today's decision by the ACCC does not change the [results] guidance we provided to the market on 21 August 2006, as there is no change in the assumptions that the guidance was based on," he said.