Significant cut in Telstra's charges for transferring business numbers after ACCC inquiry

Telstra has agreed to reduce its complex local number porting charges by almost 50 per cent after an Australian Competition and Consumer Commission inquiry.

"The ACCC is delighted with this result, which will remove a substantial impediment to competition between telecommunications carriers and carriage service providers", ACCC Chairman, Professor Allan Fels, said today.

The agreement relates to porting of 'complex' numbers. These are numbers associated with a 'complex service', typically associated with business applications involving blocks of numbers or a smaller range of numbers.

Unlike simple local number portability (LNP), which is predominantly an automated process, the porting of complex numbers requires project management and many manual steps that add substantial additional costs to the porting process.

"Late last year the ACCC received complaints from a number of carriers, carriage service providers and business consumers alleging Telstra was imposing excessive charges for providing complex LNP.

"They claimed this acted as a disincentive for Telstra's customers to change carriers and thereby inhibited competition. They also claimed Telstra's charges breached the ACCC's Pricing Principles for LNP".

Preliminary investigations showed there were grounds for concern and the ACCC raised these concerns with Telstra in late October 2001.

"After lengthy negotiations Telstra has agreed to reduce its charges to a level in line with those levied by other carriers and carriage service providers. This will result in appreciably lower costs for service providers and ultimately for business customers wishing to port their numbers.

"This is a very good outcome for the industry and consumers as a whole. The ACCC acknowledges Telstra's cooperation in this matter".

Background

Under the Telecommunications Numbering Plan 1997 carriers and carriage service providers (CSPs) are obliged to provide local number portability (LNP), including complex LNP, which allows customers to change their supplier of local telephone calls but still keep their telephone number. Many customers place a high premium on being able to retain their numbers, particularly business customers.

There are charges associated with the porting process. These charges are generally levied at the time when the customer ports their numbers away from their carrier.

The ACCC may be required to arbitrate disputes between parties who are unable to agree on the terms and conditions upon which LNP is provided, pursuant to section 462 of the Telecommunications Act 1997.

In June 1999 the Commission published Pricing Principles for Local Number Portability (LNP Pricing Principles) which set out principles to determine how the costs associated with the provision of LNP should be attributed between the various parties in the porting process.

One of the main principles is that each CSP is responsible for costs incurred in their own network to meet their obligations to provide LNP. By bearing their own costs of providing LNP there is an incentive on CSPs to adopt the most efficient methods of providing LNP to customers, therefore resulting in lower costs for CSPs and ultimately porting prices for customers. The LNP Pricing Principles permit service providers to recover the efficiently incurred costs of providing LNP.

Telstra's complex services include Telstra's OnRamp 30, Analogue Indial, Macrolink; Spectrum, Siteline and Line Hunt. Other carriers and carriage service providers (CSPs) also charge for complex local number portability, although the level of charges across the industry is varied.