ACCC begins public consultation on telstra's ULLS monthly charge undertakings

The Australian Competition and Consumer Commission today issued its discussion paper on Telstra's latest Unconditioned Local Loop Service monthly charge access undertakings, now that public versions of Telstra's supporting material have been received.

A significant change made by Telstra in its new undertakings is its proposal that a single averaged $30 monthly charge be levied in all geographic areas for the period 2006-08. Previous Telstra undertakings have proposed different prices in different geographic regions.

Telstra claims a single average charge for ULLS for all regions is required for it to meet the Government's retail price parity requirements for basic line rental products.

The discussion paper gives interested parties the opportunity to comment on Telstra's proposed monthly price and supporting arguments.

The ACCC has previously considered ULLS monthly charges on a number of occasions and on 21 December 2005 rejected Telstra's previous ULLS monthly charge undertaking, which covered the period 2004-2006.

"The ACCC will carefully assess Telstra's new geographic averaging proposal in considering whether to accept or reject the undertakings", ACCC Chairman, Mr Graeme Samuel, said. "The ACCC also notes that Telstra has substantially modified its network modernisation provisions, and will be examining these changes closely".

The ACCC is obliged to consider all issues raised and in the course of its considerations will again assess network cost, ULLS-specific cost and cost of capital arguments that have arisen in previous assessments.

Copies of the discussion paper and Telstra's supporting material will be made available on the ACCC website.

Background

The ULLS is a service for access to unconditioned cable, usually a copper wire pair, between a telephone exchange and an end user's home or office. The ULLS essentially gives an access seeker the use of the copper pair without any dial tone or carriage service. This allows the access seeker to use its own equipment in an exchange to provide a range of services, including traditional voice services and high speed internet access, to the end-user.

Telstra's undertakings specify terms and conditions on which Telstra undertakes to supply the ULLS to access seekers. The undertakings propose a uniform geographically-averaged price of $30 a month for the ULLS for the period 1 January 2006 to 30 June 2008.

Telstra had previously provided a ULLS monthly charge undertaking, along with Line Sharing Service monthly charge, ULLS connection charge and LSS connection and disconnection charge undertakings, in December 2004. The ACCC issued final decisions to reject the ULLS and LSS monthly charge undertakings in December 2005. On 11 January 2006, Telstra applied to the Australian Competition Tribunal seeking a review of the ACCC's LSS monthly rate undertaking decision.