Telstra loses bid to double wholesale cost

The Australian Competition Tribunal (ACT) yesterday rejected Telstra's push to double the wholesale price for access to its Unconditioned Local Loop Service (ULLS) in metro areas.

Telstra had proposed an increase from the current ULLS price of around $16 to a new one of $30. The proposed increase would apply to the vast majority of suburban and regional exchanges that are considered "Band 2", according to Optus.

The ULLS allows carriers to gain access to Telstra's copper network between the exchange and premise for a price set by the Australian Competition and Consumer Commission (ACCC). It allows carriers such as Optus to resell Telstra's copper and use their own network as the backhaul.

Telstra's push for a $30 ULLS has been rejected a number of times by the ACCC and the ACT.

The telco said it had been 12 months since it had last appealed the decision.

"Since then the ACCC has started industry consultation on how to best determine regulated access pricing," Telstra said in an emailed statement this afternoon. "We support this approach and are focused on achieving certainty for Telstra and industry, as quickly as possible, through a resolution of the appropriate costing of our network."

On 21 December 2007, Telstra lodged an undertaking with the ACCC that proposed a monthly charge of $30 for each Telstra ULLS connected at an exchange building in a "Band 2" area. This undertaking was later withdrawn and replaced with its March 2008 undertaking.

Soon after the March 2008 undertaking was lodged, the ACCC released a discussion paper in June 2008 and a draft decision to reject the ULLS undertaking on 13 November 2008.

On 22 April 2009, the ACCC decided to reject the undertaking. The ACCC released a final decision to reject this Telstra ULLS undertaking on 28 April 2009.

Optus director of government and corporate affairs Maha Krishnapillai said Telstra needed to realise that "its war on ULL wholesale prices has now been lost".

"For the benefit of the industry and Australia's broadband customers, it should call off its lawyers and confirm today that no further appeals to raise broadband prices will take place."

The ACCC has detailed history of the Telstra undertaking on its website.