ACCC issues telecommunications fixed services cost model for consultation
The Australian Competition and Consumer Commission today commenced a public consultation on a model commissioned by the ACCC for regulated fixed network services through the release of a discussion paper and model documentation.
The model can estimate a price for access to Telstra's copper wire network by infrastructure based service providers to supply broadband and voice services. The model can also estimate prices for resellers of Telstra's wholesale voice services.
"This model has been developed using the ACCC's current pricing principles. However, the initial parameter values and resulting prices are not necessarily reflective of what the ACCC would conclude in regulatory pricing processes such as in the assessment of undertakings and in arbitrations," ACCC Chairman, Mr Graeme Samuel, said today. "The model was developed so users can test different assumptions and parameter values relevant in estimating the price of regulated fixed network services."
"The ACCC encourages industry comment focussed on appropriate model structure, engineering assumptions and parameter values," Mr Samuel said. "Industry involvement will assist in developing a robust and comprehensive cost model, which can later be used in a consultation process of prices."
The model also has a number of key features that may be relevant to users. For instance, the model has the ability to cost sub-loops and the flexibility to price potential future regulated services.
The results of this model once finalised, along with other models provided by other parties and benchmarking, are important inputs in the regulatory decision making process. Cost models make an important contribution to the information regulators rely upon when making decisions. The ACCC will continue to have regard to a range of information including cost models in order to take a balanced approach to setting access prices for regulated services.
The ACCC invites interested parties to respond to the issues raised in the discussion paper by 5 p.m., 20 February 2009.
The Discussion Paper and supporting model documentation will be available on the ACCC's website
To access the model, interested parties will need to register with relevant ACCC contact officer and details of how to register are included in the discussion paper.
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, or Commissioner Mr Ed Willet, please call Ms Lin Enright, ACCC media, on (02) 6243 1108 or 0414613 520.
For general inquiries, please call the Inforcentre: 1300 302 502.
The model provides estimates of the price of a set of current declared fixed line services, including:
PSTN originating and terminating access service (PSTN OTA)
Unconditional local loop service (ULLS)
Local carriage service (LCS)
Wholesale line rental (WLR), and
Line sharing service (LSS).
The telecommunications fixed service model will complete the ACCC's suite of models for declared services. The other models available to the ACCC are the WIK mobile terminating access service model and the GQ-AAS domestic transmission model.
Each of the models available to the ACCC can be applied to all geographic areas of Australia.
Analysys Mason Limited ('Analysys') were engaged following a request for tender issued in February 2007, to develop a bottom up cost model to help inform the ACCC about the estimated efficient cost of supplying existing and future fixed network services in Australia. Table 1.1 below sets out the timeframes to date and expected timing of events.
Timeline of events
Timing
Milestone
February 2007
Request for tender issued
August 2007
Analysys commissioned
September 2007
Major carriers invited to meet with Analysys and the ACCC to discuss the development and population of the model. A data request was also issued to major carriers
December 2008
Release of the Analysys cost model and related documentation.
February 2009
Close of consultation
First quarter 2009
Proposed Analysys model workshop
First half 2009
Final version of the model to be released following which the process for consulting on indicative prices will commence.
