ACCC issues draft pricing principles for transmission capacity services

30 June 2004

The Australian Competition and Consumer Commission today issued a draft guide outlining the pricing principles the ACCC will generally apply when assessing arbitrations and undertakings for the transmission capacity service. The ACCC is seeking comments from interested parties on the draft guide.

Transmission capacity is a generic service that can be used for the carriage of voice, data or other communications using wideband or broadband carriage (the minimum bandwidth in the current declaration is 2 Mbps). Carriers/CSPs can use transmission capacity to set up their own networks for aggregated voice or data channels, or for integrated data traffic (such as voice, data and video).

"The issuing of pricing principles is designed to increase certainty about the ACCC's approach to determining appropriate prices for regulated access to the transmission capacity service", ACCC Commissioner, Mr Ed Willett, said today. "It should also assist industry in reaching commercial agreements on the price of the transmission capacity service, which is something the ACCC encourages".

In the draft guide, the ACCC indicates that it will likely use a Total Services Long Run Incremental Cost (TSLRIC) methodology when arbitrating disputes or assessing undertakings for the transmission capacity service. Such an approach is consistent with the pricing principles developed for a number of other declared services (such as Domestic PSTN originating and terminating services and Unconditioned Local Loop Services).  It is also consistent with the ACCC's Access Pricing Principles that were issued in 1997. However, in the absence of information to readily apply this approach, it will consider the use of benchmarking methodologies.

"The ACCC prefers access prices based on the TSLRIC approach as these prices are consistent with those that would prevail in a competitive market", Mr Willett said.

Pricing Principles for Declared Transmission Capacity Services – a guide is available on the ACCC's website. The ACCC seeks comments on the draft guide by 30 July 2004.

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Release number: 
MR 112/04
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