Hobart public hearing into retail price controls on Telstra

The Australian Competition and Consumer Commission is reviewing the price control arrangements that apply to Telstra and which are due to expire on 30 June 2005.

"The current price control arrangements specify maximum prices Telstra can charge, on average, for fixed line telephony services, including line rental and local calls," an ACCC Commissioner, Mr Ed Willett, said today. "Within these maximum average prices Telstra is free to set its own charges for certain consumers – such as business, residential, metropolitan, rural communities or pensioners".

The ACCC will review:

• the price cap that allows Telstra to increase line rentals each year
• the price cap requiring price reductions in a basket of local, fixed-to-mobile and domestic and international long-distance calls
• the requirement on Telstra to cap calls at 22 cents per call (40c from a public payphone) and
• the local call parity requirement which means Telstra must ensure its customers in non-metropolitan areas pay broadly the same price for untimed local calls as those in metropolitan areas.

The ACCC is holding a public hearing for the review in Hobart on Monday 30 August at
10.30 a.m. The meeting will be held at the Corus Hotel in the Wellington Room, 156 Bathurst Street, Hobart.

"I encourage you to come along and have your say on this important issue".

Background

On 23 April 2004 the Minister for Communications, Information Technology and the Arts directed the ACCC to hold a public inquiry about the nature of price arrangements that should apply after the expiration of the current price control arrangements on 30 June 2005. The ACCC must report to the Minister by 31 January 2005. The ACCC is directed to consider among other things, what form any future price control arrangements should take, including their duration, means of implementation, whether any complementary arrangements are necessary, and mechanisms for assessing or enforcing compliance. In June 2004 the ACCC issued a discussion paper about the review (see links).