ACCC releases LCS and WLR pricing principles and indicative prices for 2008-09
The Australian Competition and Consumer Commission today issued final pricing principles and indicative prices for the local carriage service (LCS) and the wholesale line rental (WLR) service for 2008-09.
The final pricing principles continue to adopt a retail–minus–retail–cost (RMRC) approach to pricing access to the LCS and WLR service. The final indicative price for the LCS decreases from the previous period's 17.92c to 17.36c. This reflects an increase in Telstra's unit avoidable retail costs. The final indicative prices for the WLR service increases from $23.12 to $25.57 for residential services and from $25.84 to $26.93 for business services. This reflects a decrease in Telstra's unit avoidable retails costs and an increase in the retail price of Telstra's HomeLine Part services.
The ACCC's indicative prices are determined by deducting Telstra's avoidable retail costs from the retail prices of chosen benchmarks. The ACCC took the view that the appropriate retail benchmarks for the LCS and WLR service are Telstra's unbundled HomeLine Part and BusinessLine Part services.
The ACCC stated that in the absence of a suitable industry cost model for both the LCS and WLR capable of producing reliable cost estimates, and noting the ACCC's development of its own fixed network services cost model, it is not appropriate to adopt cost–based pricing principles at this stage.
The ACCC noted that Telstra's TEA model is not currently capable of calculating a TSLRIC price of WLR. The model is restricted to Band 2 ULLS pricing. The ACCC fixed network services cost model should be available for a public consultation process by the fourth quarter of 2008, although it may not be finalised for use until early 2009.
The LCS is used by service providers to supply local calls to end-users. It allows competitive entrants to resell local calls without deploying substantial alternative infrastructure. The ACCC declared the LCS in August 1999.
The WLR allows access seekers to resell the basic line rental that allows an end-user to connect to the traditional voice network, make and receive voice calls, and have a telephone number. The ACCC declared the WLR service in July 2006.
The ACCC is required by section 152AQA of the Trade Practices Act 1974 (Act) to determine pricing principles for a declared service. The pricing principles may contain price-related terms and conditions and the ACCC may, when determining price-related terms and conditions, specify indicative prices. The ACCC intends that the indicative prices will be treated as price related terms and conditions under subsection 152AQA(2) of the Act.
