ACCC publishes Telstra's exemption applications for wholesale line rental and local call resale
The Australian Competition and Consumer Commission today published exemption applications made by Telstra in respect of its supply of wholesale line rental and local call resale services for a significant proportion of the Australian population.
In its applications, Telstra seeks ACCC orders exempting it from the obligation to supply these wholesale products to its competitors upon request.
Under the Trade Practices Act 1974, the ACCC must not make an order granting an exemption unless it is satisfied that the exemption will promote the long-term interests of end users.
Copies of the exemption applications together with public versions of Telstra's supporting submissions will be available from the ACCC's website. The ACCC invites submissions on any aspect of the exemptions.
The ACCC will shortly issue a discussion paper and set a time limit for submissions on the exemption applications by interested parties.
The ACCC is currently working with Telstra to ensure interested parties have reasonable access to Telstra's confidential submissions, to allow adequate examination and comment on the applications. In the meantime, parties should contact Telstra directly for access to its confidential supporting material.
The ACCC is also currently arbitrating four access disputes in relation to the wholesale line rental and local call resale services under the dispute resolution procedures in Division 8, Part XIC of the Act. Given that the legislation contemplates that arbitrations be conducted in private, the ACCC will not be making any public comment in relation to the disputes at this stage.
The local call resale service (LCS) is used by competitors to supply local calls to end users. It allows competitive entrants to resell local calls without deploying substantial alternative infrastructure.
The wholesale line rental service (WLR) allows for access to the public switched telephone network and is an essential component in provision of retail telephony services such as local, long distance and international calls. A fixed line competitor cannot obtain customers without offering a line rental service.
On 28 July 2006 the ACCC issued its Local services review—final decision. The ACCC decided to re-declare the local call resale service and explicitly regulate wholesale line rental (by declaring the service). The ACCC also published its draft determination on pricing principles and indicative prices for both services at this time.
The ACCC price-related terms and conditions local call resale and wholesale line rental are as follows:
for local call resale 17.92c per local call
for wholesale line rental indicative price of $23.12 for residential line rental and $25.84 for business line rental.
The indicative prices relating to the pricing of local call resale and wholesale line rental set out a retail minus retailing costs approach for the 2006-07 calendar years, which is to be transitional in nature. They will stay in place while the ACCC undertakes more detailed analysis on assessing efficient costs and prices using appropriate costing models.
The ACCC is currently assessing tenders for the development of a TSLRIC+ fixed network services costing model.
TSLRIC+ is the forward-looking estimate of total incremental costs associated with the provision of a service. The "plus" refers to an adjustment that is allowed to recover common costs.
Presently, the ACCC is arbitrating access disputes between Telstra and Chime and Primus (each) in respect of both the local call resale service and the wholesale line rental service.
