ACCC issues draft pricing principles, indicative prices for fixed line services
The Australian Competition and Consumer Commission today issued its draft pricing principles and indicative prices for six fixed line wholesale services for the next three years.
The services are the unconditioned local loop service (ULLS); the line sharing service (LSS); the public switched telephone network originating access (PSTN OA) service; the public switched telephone network terminating access (PSTN TA) service; the local carriage service (LCS); and the wholesale line rental (WLR) service.
The draft pricing principles propose that all six services will be priced on a cost basis.
These services enable Telstra's competitors to provide fixed voice and broadband services over Telstra’s copper network. The ACCC considers setting indicative prices for wholesale access to these services will help to guide industry when negotiating the terms and conditions of access.
The ACCC now has a range of information sources, including cost model data and international benchmarking, that provide it with a better indication of the costs of providing fixed line services. With the advantage of this better data, the ACCC has been able to simplify the pricing structure for access to some of these services by using a two zone approach. This more accurately reflects the costs of providing services in these zones without distorting competitive signals in the market.
ACCC chairman, Graeme Samuel, called for comment on the draft decision, saying "we aim to give a direction to industry about the level of price the ACCC considers is a reasonable starting point for negotiations between Telstra and its wholesale customers over the next three years."
While the indicative prices for some service have risen, the prices for other services have declined. Where appropriate, the ACCC has adopted adjustment paths to reduce the extent of price volatility during the transition from previously set prices to those based on better information.
The draft pricing principles and indicative prices, along with supporting material will be available on the ACCC website. Submissions are due by September 25 2009.
