ACCC begins review of price control arrangements

28 June 2004

The Australian Competition and Consumer Commission today issued a discussion paper commencing the review of the retail price control arrangements that apply to Telstra.

The Minister for Communications, Information Technology and the Arts, Mr Daryl Williams, issued a direction on 23 April 2004 requiring the ACCC to undertake the review. The review is to be completed by 31 January 2005.

"The direction requires the ACCC to hold a public inquiry into the nature of the price control arrangements that should apply after the expiration of the current price control arrangements on 30 June 2005", ACCC Chairman, Mr Graeme Samuel, said today.

"Consideration is to be given to the impact of existing and future price control arrangements on competition, investment and different groups of consumers. 

"The direction also requires the ACCC to consider the implication of new and emerging technologies for the price control arrangements". 

At present, Telstra is subject to a number of specific price controls under the Telstra Carrier Charges – Price Control Arrangements, Notifications and Disallowance Determination No. 1 of 2002.  Some of the price controls on Telstra that will be open to review include the price cap that allows Telstra to increase line rentals each year; the price cap requiring price reductions in a basket of local, trunk and international calls; the requirement on Telstra to cap local calls at 22 cents per call (40c from a public payphone); and the local call parity requirement which requires Telstra to ensure its customers in non-metropolitan areas pay broadly the same price for untimed local calls as those in metropolitan areas.

The discussion paper raises a number of issues that the ACCC considers relevant to the review.  It seeks written submissions from the public on these issues by 13 August 2004.  Following this the ACCC intends to conduct public hearings around Australia where it will receive oral submissions.  Dates and locations for these will be announced in due course.

The ACCC aims to issue a draft report by the end of October 2004.  Interested parties will be provided with an opportunity to provide submissions on the draft report by the end of November 2004.  The ACCC expects to finalise its review of the price control arrangements by the end of January 2005, as directed by the Minister.

The discussion paper can be obtained from the ACCC's website(see below), ACCC offices or by calling 1300 302 502.

Release number: 
MR 107/04
ACCC Infocentre: 

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Mr Graeme Samuel - 0408 335 555
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Ms Lin Enright - (02) 6243 1108