ACCC issues final decision on regulation of the Line Sharing Service
The Australian Competition and Consumer Commission today released its final declaration decision for the Line Sharing Service*.
"The ACCC's final decision is to regulate the LSS on a national basis until 31 July 2009. Declaration of the LSS will be in the long-term interests of end users," ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC's final view is that regulation of the LSS will promote competition in broadband markets. This will allow consumers to choose from a wider range of broadband service providers, increasing their opportunity to gain a more competitive service-price offering."
The ACCC's decision to only declare the LSS service until 31 July 2009 will allow the ACCC to next consider the regulation of the service as part of its proposed comprehensive review of fixed line services regulation that will commence in 2008.
The ACCC has also released pricing principles and indicative prices for the LSS. These indicative prices are based on analysis undertaken by the ACCC in three recent LSS arbitration final determinations.
The single connection and disconnection charges have been revised upward slightly (in the order of 50c) from those previously issued in LSS arbitration final determinations, reflecting updated cost data provided by Telstra. The 2007-08 connection charges are also scaled up, by a predicted increase in labour costs, to provide connection charges from 1 July 2008.
The following indicative prices for the LSS apply between 1 January 2008 and 31 July 2009.
Charge
LSS monthly charge
$2.50 per service (1 Jan 2008 to 31 Jul 2009)
LSS connection not made in a managed network migration
$41.40 per connection (1 Jan 2008 until 30 Jun 2008)
$43.10 per connection (1 Jul 2008 until 31 Jul 2009)
LSS disconnection not made in a managed network migration
$37.10 per connection (1 Jan 2008 until 30 Jun 2008)
$38.70 per disconnection (1 Jul 2008 until 31 Jul 2009)
However a disconnection charge will not be payable where:
the disconnection is made pursuant to the Telstra LSS churn process, or
the access seeker is participating in the Telstra LSS churn process and Telstra (BigPond) is not participating in the Telstra LSS churn process
LSS managed network migration - fixed amount
$134.50 per MNM (1 Jan 2008 until 30 Jun 2008)
$140.10 per MNM (1 Jul 2008 until 31 Jul 2009)
LSS managed network migration - variable amount
$30.90 per connection (1 Jan 2008 until 30 Jun 2008)
$32.20 per connection (1 Jul 2008 until 31 Jul 2009)
LSS managed network migration - minimum charge
$752.50 per exchange per MNM (1 Jan 2008 until 30 Jun 2008)
$784.10 per exchange per MNM (1 Jul 2008 until 31 Jul 2009)
*The LSS allows two carriers to provide separate telecommunications services over a single metallic pair or line. The higher frequency part of the line is used by the access seeker to supply broadband (DSL) services, while the access provider supplies a PSTN voice service over the same line. The LSS was originally declared on 30 August 2002.
The LSS description specifies that the LSS is only provided in association with the provision of an underlying PSTN voice service on the same line. That is, the LSS monthly charge is a payment from access seekers to Telstra for the use of only the high frequency part of the line. It follows that whenever the LSS is sold Telstra also recovers money from the underlying voice service in addition to the $2.50 LSS monthly charge. That is, Telstra will receive a monthly line rental charge, either at wholesale or retail rates.
The ACCC's current indicative price for monthly wholesale line rental charges is $23.12 (excl. GST) per month for residential users. The line rental charge for Telstra's most popular residential plan, HomeLine Plus, is $27.23 (excl. GST) per month. This structure ensures that the underlying costs of the copper line are always fully recovered when an LSS service is sold.
**Section 152ALA of the Trade Practices Act 1974 requires the ACCC to review each declaration within the year preceding its expiry date.
The ACCC must decide whether declaring the service would promote the long-term interests of end users (LTIE) of carriage services, or of services supplied using carriage services ('listed services').
In determining whether declaration promotes the LTIE, regard must be had only to the extent to which declaration is likely to result in the achievement of the following objectives.
promoting competition in markets for listed services
achieving any-to-any connectivity in relation to carriage services that involve communication between end-users
encouraging the economically efficient use of, and the economically efficient investment in, the infrastructure by which telecommunications services are supplied.
