The Australian Competition and Consumer Commission has issued final access determinations for the fixed line telecommunications services following the completion of its public inquiry.
The final access determinations detail wholesale access prices for the fixed line network which will apply for a three-year regulatory period commencing on 1 July 2011 and expiring on 30 June 2014. The final access determinations incorporate prices included in the interim access determinations of March 2011, for the period from 1 January 2011 to 30 June 2011.
The final prices differ from the draft prices proposed in the ACCC’s April 2011 Discussion Paper. The Unconditioned Local Loop Service price is slightly lower than the draft prices while the Wholesale Line Rental price is slightly higher. Prices have been set for a three year, rather than the draft five year regulatory period, as there was broad industry agreement on the difficulty of forecasting for such a long period given uncertainty about the timing of the roll-out of the NBN.
The prices included in the final access determinations apply where there is no commercial agreement between an access seeker and the infrastructure operator, Telstra. They create a benchmark that the parties can fall back on when they have not negotiated alternative access terms.
"The ACCC is committed to promoting competition and providing an appropriate level of price stability during the NBN roll-out and subsequent migration of services from the copper network to the NBN," ACCC chairman Graeme Samuel said. "This decision will benefit both industry and telecommunications end-users."
The prices for the six fixed line services have been derived using a Building Block pricing framework, which is commonly used in other regulated industries. Moving to a Building Block pricing model has been widely supported by industry for some time.
"The ACCC has included fixed principles provisions in the final access determinations. These provisions lock in the assessed value of Telstra’s assets and the framework for setting prices beyond the expiry of the current final access determinations," Mr Samuel said.
"These measures will promote certainty and predictability in the way the ACCC will calculate prices for these services for the next ten years."
The ACCC has recognised the need for further industry consultation on the issues of exemptions and non-price terms for the final access determinations. The ACCC has decided to maintain the exemptions and non-price terms in the final access determinations in their current form (with minor amendments) until further consultation has been completed.
The further consultation in relation to exemptions is expected to be concluded before the end of the year.
The ACCC is considering the issue of non-price terms in two separate public inquiries in relation to making final access determinations for the Domestic Transmission Capacity Service and Mobile Terminating Access Service. As many non-price terms are common to all regulated services, the ACCC will consult further on non-price terms for the fixed line services, if needed, after the processes in relation to the other regulated services are completed.
The final access determination prices for the declared fixed line services and a description of the relevant services are set out below.
The ACCC’s final report sets out in detail the methodology, assumptions and model inputs used by the ACCC to estimate these prices. The final report will be available on the ACCC’s website.