ACCC issues Telstra accounting separation report for March quarter 2008
The Australian Competition and Consumer Commission today issued its report for the quarter ending 31 March 2008 under the enhanced accounting separation regime for Telstra.
The report tests whether there is systematic discrimination in the price or non-price terms offered to Telstra's retail and wholesale customers, and so provides general guidance on the potential for competing service providers to supply consumers. It is not intended to detect all forms of potentially anti-competitive conduct.
Amongst other findings, the report notes that in the March 2008 quarter:
imputed margins generally remained steady, with only margins on fixed-to-mobile service declining significantly
wholesale residential customers received inferior service for those basic access connections that require work at the customer premises
wholesale customer otherwise generally received as good or better service than retail customers.
Telstra has reported inferior wholesale service levels for the connection of basic services in prior quarters, but not to the extent of that reported for the current quarter. Telstra has advised that extreme weather conditions caused the reduction in service quality for wholesale customers observed in the quarter, as technicians were redeployed to restore services in affected areas.
"The ACCC has written to Telstra to express concern that its response to weather events can more severely affect the quality of wholesale services," ACCC Chairman, Mr Graeme Samuel, said today. "We have requested Telstra to inquire into the steps that it can take to isolate all the factors that have led to this result, and to take appropriate steps to ensure equivalent levels of service are supplied in future."
The enhanced accounting separation regime was introduced to address competition concerns arising from the level of vertical integration between Telstra's wholesale and retail services, and also to improve the provision of price and cost information to the ACCC, competing telecommunications service providers, and the public.
On 19 June 2003, the then Minister for Communications, Information, Technology and the Arts directed the ACCC to issue record-keeping rules to Telstra, requiring Telstra to report on:
current costs in addition to historical costs under the Telecommunications Industry Regulatory Accounting Framework (CCA reports)
imputation analysis comparing Telstra's retail prices and the costs faced by access seekers in purchasing certain core telecommunications services from Telstra (imputation reports)
key performance indicators on non-price terms and conditions that compare Telstra's customer service performance between specified retail and wholesale supplied services (NPTC reports).
The direction requires that the ACCC make the reports publicly available and comment on the reports submitted. In accordance with the direction, the ACCC first issued record-keeping rules to Telstra in June 2003. The ACCC issued revised these rules in September 2004.
