Telstra to come under greater ACCC scrutiny - News - Communications

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This story was printed from ZDNet Australia.
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Telstra to come under greater ACCC scrutiny

By James Pearce, ZDNet Australia
March 19, 2003
URL: http://www.zdnet.com.au/news/communications/soa/Telstra-to-come-under-greater-ACCC-scrutiny/0,130061791,120272995,00.htm

The Australian Competition and Consumer Commission will soon have greater powers to detect anti-competitive behaviour from Telstra under a draft direction issued by the Minister for Communications.

Ever since the federal Opposition abandoned its proposal for the structural separation of Telstra, the industry has looked to accounting separation, announced by the government early last year, as the best way to ensure Telstra doesn't use its market dominance to unfairly discriminate against its competitors.

"There has been criticism from industry that there is no accounting transparency in Telstra's wholesale and retail costs and claims that it may be discriminating between the prices it charges itself for core interconnect services and those it charges its competitors who access its network," reads the explanatory statement issued by the Department of Communications, Information Technology and the Arts (DCITA). "There have also been ongoing concerns that Telstra may be setting retail prices derived from these core services at levels which do not allow a sufficient margin for competitors to compete in the market."

The draft Australian Competition and Consumer Commission (Accounting Separation Telstra Corporation Limited) Direction (No. 1) 2003 will require the ACCC to ensure that Telstra publishes current and historic financial statements for its core interconnect services.

It will also require Telstra to provide information to the ACCC revealing the margins that would be available to Telstra if it were to purchase the core interconnect services at the prices it charges external access seekers. The ACCC will publish a qualitative report on competition in the corporate segment of the business customer group every six months.

Having the additional costing information will allow the ACCC and Telstra's competitors to identify possible discrimination and anti-competitive behaviour far more easily.

DCITA are seeking public comment on the draft direction before May 2, after consideration of which a final direction will be issued.