Australia's largest telco, Telstra, has been urged by the national competition watchdog to reduce the prices it charges other operators to access its fixed line network.
The Australian Competition and Consumer Commission (ACCC) said Telstra should cut charges on a variety of retail services such as local, long distance, international and fixed-to-mobile calls. The pair have been at loggerheads for years over pricing, with Telstra arguing the ACCC's use of a European pricing model lacks relevance in a country the size of Australia.
The telco gave its access undertakings in January, after which the ACCC issued draft recommendations in June and its largely unchanged final determination yesterday.
In relation to charges for the Public Switched Telephone Network (PSTN), the ACCC recommended a transition to cost-based pricing over the next three years.
In the meantime, PSTN originating and terminating (O/T) charges should initially be reduced by around 10 per cent to 1.25 cents per minute (cpm) in 2003/04 through to 1.0 cpm in 2005/06, the ACCC said. "The PSTN O/T rates would also be around 38 per cent lower than the rates outlined in Telstra's most recently proposed undertakings," it said.
ACCC chairman Graeme Samuel said the model terms and conditions were not binding, but provided guidance as to the ACCC's views on fair terms and conditions of access to these core telecommunications services.
"In particular, the final determination specifies lower access charges for use of Telstra's fixed network over the next three years," Samuel said.
The determination also maintained the ACCC's proposed model prices for access to the Unconditioned Local Loop Service (ULLS).
This is a service which enables Telstra's competitors to directly gain access to its local copper network and provide their own range of telephony services, including DSL broadband services.
"The prices for local loops recommended by the ACCC compare favourably with international averages and it is hoped this will encourage the further uptake of the broadband services which are provided via the ULLS service," it said.
The ACCC's recommendations are likely to be adopted as regulated pricing unless Telstra appeals.
Telstra said it was considering the decision.
"We are evaluating the ACCC's final draft and I expect that we will make a decision on our next step very quickly," Telstra public affairs manager, legal & regulatory, Rod Bruem said.
A spokesman from rival telco Optus declined to comment until the full implications of the ACCC decision had been determined.
Australian Consumers' Association senior policy officer, IT and Communications, Charles Britton said the ACA would have preferred a recommendation to separate Telstra's wholesale and retail operations.
"The separation of wholesale from retail is a far more pressing issue," Britton said.
"A ringfencing would mean Telstra would own them both but they would be managed in a much more separated fashion. "Pricing would become much more transparent."
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