ACCC proposes line sharing service access charge of $7-$8

25 June 2004

The Australian Competition and Consumer Commission today proposed a monthly access charge for Telstra’s Line Sharing Service (LSS) of around $7-8 per service. This recommendation comes as a part of the ACCC's Draft Report in which it proposes to reject Telstra's LSS access undertaking.

The LSS is a service that enables two carriers to provide separate services over a single metallic pair or 'line'. It allows Telstra to supply basic telephone services to a consumer while also enabling its competitors to provide high‑speed broadband services, such as ADSL, to the customer on the same line.

"It is the ACCC's preliminary view that the LSS undertaking should be rejected, largely because the proposed monthly access charge of $15 per service was well above efficient costs", ACCC Commissioner, Mr Ed Willett, said today.

"The ACCC has formed a view that the monthly charge of $15 per service is not reasonable as it is significantly higher than what would be justified by the efficient costs of supplying the service. Such a price will not promote competition, as it is unlikely to encourage service providers to invest in their own facilities to provide broadband services. It is also unlikely to encourage efficient use and investment in infrastructure by Telstra".

According to the ACCC's preliminary view of efficient costs, the monthly charge should be closer to $7-8 per service.

The undertaking was lodged on 1 September 2003 and the ACCC has consulted widely to ensure interested parties have had an opportunity to fully express views and provide relevant information. It has also sought further information from Telstra on costs and other aspects of the supply of the service to better inform its assessment.

Ordinarily, under the Trade Practices Act 1974, the ACCC has six months to determine whether to accept or reject a proposed undertaking. However, in this instance, the need for further information on costs and other matters has led to the assessment process to be extended.

The ACCC's draft report, as well as the undertaking and Telstra’s supporting submissions and other public submissions from interested parties, are available on the ACCC website. Interested parties are encouraged to comment on the ACCC's draft report by lodging submissions.

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Release number: 
MR 103/04
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