The Australian Competition and Consumer Commission today set final copper local loop indicative prices for 2008-09 and issued a discussion paper on Telstra's ULLS undertaking.
The final indicative prices for the ULLS monthly charge to apply from 1 July 2008 to 31 July 2009 increase from the previous period. For instance, metropolitan (Band 2) indicative prices will increase from $14.30 to $16. This increase reflects the rise in interest rates and input costs.
"The release today of copper local loop indicative prices will provide greater certainty and guidance to industry," ACCC Chairman, Mr Graeme Samuel, said today. "A better informed market will give industry confidence in future growth and investment decisions, and encourage a more competitive market place.
"Setting indicative prices for the copper local loop will encourage a more stable and certain market place. This creates greater incentives for strong industry investment and therefore promotes vigorous and sustainable competition.
"Better service offerings for consumers in terms of price, quality and innovation are some of the benefits that flow from such competition."
The indicative prices are based on Telstra's PIE II cost model. The ACCC took the view that it would be inappropriate to use the recent Telstra Efficient Access cost model which has yet to be subject to external review and testing. In this regard, the ACCC encourages industry to respond to the ACCC's discussion paper on the Telstra's ULLS undertaking, of which the TEA model is a major element.
"The ACCC has begun a public consultation process and encourages industry participants to respond to the issues raised in the discussion paper to assist the ACCC in making its decision to accept or reject the undertaking."
Telstra is requesting a monthly charge of $30 for each ULLS in Band 2 Exchange Service Areas applying for the period to 31 December 2010.
In support of its undertaking, Telstra submitted the TEA model and other supporting documentation. A copy of Telstra's undertaking, public supporting material and the ACCC's discussion paper, is available from the ACCC's website.
The ACCC invites interested parties to provide written submissions by 12 August 2008.
The ACCC may seek to review its ULLS indicative prices upon making its final decision on Telstra's ULLS undertaking, which is likely to occur in November 2008, at the earliest.
Telstra has claimed confidentiality over the TEA model and other material to support its undertaking. Confidentiality arrangements put in place by Telstra are complex, and have the potential to be confusing. The ACCC will continue to maintain a watching brief on this issue, and would be interested to hear from parties having difficulties gaining access to material that restrict their ability to make constructive comments.