Labor demands urgent review of Telstra line fees - News - Communications

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This story was printed from ZDNet Australia.
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Labor demands urgent review of Telstra line fees

May 06, 2004
URL: http://www.zdnet.com.au/news/communications/soa/Labor-demands-urgent-review-of-Telstra-line-fees/0,130061791,139146740,00.htm

Labor today urged the competition watchdog to launch an urgent review of new telephone price hikes being introduced by Telstra.

Australia's largest telecommunications company last month announced a raft of price changes, including a $3.45 rise in line rental fees from June 1.

Call connection fees for long distance, international and fixed line-to-mobile calls will also jump by two cents to 35 cents, while customers paying bills by credit card will be slugged with fees.

Opposition communications spokesman Lindsay Tanner said some of the fee hikes exceeded guidelines set down in laws introduced in 2002 which allow Telstra to lift line rentals by the level of inflation plus four per cent.

However he said the latest price rises exceeded that amount, with line rental charges for two of Telstra's most popular residential packages set to leap by 13 per cent and 15 per cent.

Mr Tanner has written to the Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel urging the watchdog to investigate Telstra's price hikes.

"When the Howard government introduced their new Telstra price control arrangements they said there would be real price reductions in call costs under a `rebalancing' system," Mr Tanner said.

"But most residential customers are facing massive increases in Telstra line rentals with only minor tinkering with call costs and some actual increases. Consumers are clearly losing out.

"The ACCC must act. They must give a full account of the legality of Telstra's massive line rental increases imposed on consumers by the Howard government." An ACCC spokeswoman said the watchdog would look at Mr Tanner's complaints.

However she said Telstra was legally obliged to meet certain guidelines before it is allowed to increase line rentals and call charges.

"We will have to look at the detail of Mr Tanner's letter to see if there's any new issues he has brought forward," the spokeswoman said.

Labor has previously said it would impose price controls on Telstra if it wins government at the next election.

A Telstra spokesman said the increases had been approved by the ACCC before they were announced, as required under legislation.

"We are subject to an ACCC-endorsed process of rebalancing which means we are part of a process which allows us to incrementally increase (line rental charges) but calls have to come down," he said.

"It is set in law and Lindsay Tanner knows that.

"This time the (call) savings haven't looked as attractive as they have in other years, but there are discounts in this plan, 50 free local calls and free SMS (mobile phone text messages)."

The ACCC is currently reviewing Telstra's fees, with the results due to be sent to the government early next year.

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