A draft of an independent consultant's report estimating Telstra's costs of carrying other carriers' calls on its network was issued today by the Australian Competition and Consumer Commission. These charges are an important part of the cost of long-distance calls.
The draft report, Estimating the Long Run Incremental Costs of PSTN Access, has been prepared by National Economic Research Associates (NERA), who are experts in developing costing models.
"NERA has developed a comprehensive costing model of Telstra's network, which can potentially increase the transparency of Telstra's costs," Mr Rod Shogren, Commissioner responsible for telecommunications, said today.
NERA's preliminary estimates suggest that if Telstra's network was to be re-built today, the cost of telephone lines to households and business could be up to $500 per year. This includes capital and maintenance costs. The highest cost of lines would be in rural areas with a cost of up to $800 per year.
NERA's preliminary estimates also suggest the cost of carrying other carriers' calls on Telstra's network could be up to 3.6 cents per minute, plus possibly a contribution to the line costs.
"These results are extremely preliminary," Mr Shogren said today. "The ACCC won't be drawing conclusions from the model without fully testing the assumptions the model is based on.
"The issue of the draft report for industry scrutiny is an important part of the process of estimating Telstra's costs," Mr Shogren said. "The draft report is being made publicly available so the industry can comment on the assumptions made in the model. As better information is being provided through this process, NERA will revise the model".
NERA's costing report is only one part of the evidence on Telstra's proposed charges for interconnection. Other evidence has previously been published by the ACCC.
The draft report, Estimating the Long Run Incremental Costs of PSTN Access, has been prepared by National Economic Research Associates (NERA), who are experts in developing costing models.
"NERA has developed a comprehensive costing model of Telstra's network, which can potentially increase the transparency of Telstra's costs," Mr Rod Shogren, Commissioner responsible for telecommunications, said today.
NERA's preliminary estimates suggest that if Telstra's network was to be re-built today, the cost of telephone lines to households and business could be up to $500 per year. This includes capital and maintenance costs. The highest cost of lines would be in rural areas with a cost of up to $800 per year.
NERA's preliminary estimates also suggest the cost of carrying other carriers' calls on Telstra's network could be up to 3.6 cents per minute, plus possibly a contribution to the line costs.
"These results are extremely preliminary," Mr Shogren said today. "The ACCC won't be drawing conclusions from the model without fully testing the assumptions the model is based on.
"The issue of the draft report for industry scrutiny is an important part of the process of estimating Telstra's costs," Mr Shogren said. "The draft report is being made publicly available so the industry can comment on the assumptions made in the model. As better information is being provided through this process, NERA will revise the model".
NERA's costing report is only one part of the evidence on Telstra's proposed charges for interconnection. Other evidence has previously been published by the ACCC.