ACCC interim views on local carriage service pricing to encourage negotiated settlements during local services review

The Australian Competition and Consumer Commission has today provided its interim views about the pricing of Telstra's Local Carriage Service in order to facilitate the negotiation of future agreements, while the Local Services Review is under way.

"The ACCC is currently considering important issues relating to the regulation and pricing of local services as part of its Local Services Review", an ACCC Commissioner, Mr Ed Willett, said today. "As a result, rolling forward the current commercial agreements until the Local Services Review is completed, seems appropriate. The ACCC expects to complete the review during 2005-2006".

The LCS is a service for local call resale, that is, for wholesale local calls. After holding a public inquiry, the ACCC declared the LCS in August 1999.

In December 2004, the ACCC accepted Telstra's undertakings relating to the price at which Telstra is to supply LCS. These undertakings apply for 12 months and expire at the end of June 2005. In addition, the ACCC is aware that a number of negotiated agreements between Telstra and users of the LCS expire at around the same time.

"Against this background, it is appropriate that the ACCC provides guidance to the industry on the pricing of the LCS during the Review period", Mr Willett said.

The ACCC's views are consistent with its current model terms and conditions for LCS and are intended to provide guidance to market participants. However, neither this guidance nor its model rates can bind the ACCC or any parties in the exercise of its statutory power in the event that an access dispute is subsequently notified by any industry participant or an access undertaking is lodged for approval.