In the latest chapter concerning competition in the telecommunications sector, Telstra is opposing the dominant view that price controls should end quickly, saying if they're not phased out over time, telephone line rental for consumers will more than double.
"Telstra's view is that if price controls are to end, line rental would more than double in price," a Telstra spokesperson told ZDNet.
"That sort of increase is too substantial to happen overnight and a safety net is needed to protect customers, especially those on low incomes," he added.
Although the onset of competition has diminished the need for price controls, other carriers feel a seven-year time frame is too slow and are in favour of ending them immediately.
"Telstra is not doing something for anyone else's favour," telecommunications analyst Paul Budde said.
"If the price cap is taken away there will be pressure on Telstra's prices," Budde said, "undermining [Telstra's] case that it is so unique in the world to be able to charge higher rates to wholesale customers," he added.
Dragging out the termination of price controls is just another Telstra tactic to delay competition in the local loop, according to Budde.
"I find it hard to believe that Telstra will double its [line rental] price," Budde said."It won't get the chance to from competition."
The Australian Competition and Consumer Commission, has been holding Australia-wide public hearings as part of its national inquiry to determine whether there's a need for retail price control arrangements to apply to Telstra after June 30, 2001.
Price controls relevant to this inquiry include long-distance calls, local calls and line rentals.
Also under review is the 22-cent price cap on local calls and the local call parity requirement, which ensures that residential, charity and business customers in non-metropolitan areas pay similar prices for untimed local calls as in metropolitan areas.
"Carriers still see the need to keep [pricing] controls in non-metropolitan areas," ACCC Commissioner, John Martin, said after the Sydney public hearing.
The ACCC will produce a draft report late in December and hopes to produce a final report late January.
At the end of the day, the decision whether to keep or cut price controls is one for the government.
"It's their call," Martin said.
