The Australian Competition and Consumer Commission has examined the latest package of price changes by Telstra for many of its telephony services. The package contains a number of price rises including for line rental and call connection, as well as price reductions for local and fixed-to-mobile calls. Telstra is required to seek the ACCC's consent for price increases only when it proposes to raise line rental charges, as has happened in this latest package.
"The ACCC's only role in these price changes is to ensure that the processes set down by the Government for protecting the interests of low income customers are fully complied with by Telstra when it proposes to increase line rental charges", Acting ACCC Chairman, Mr Ross Jones, said today.
"If Telstra complies with the procedural requirements set out by the Determination, the ACCC has no alternative but to accept an application. As it is now satisfied that those requirements have been met, the ACCC has provided its consent".
Mr Jones said that when Telstra originally applied for consent, the ACCC was not satisfied with the process undertaken by Telstra in submitting its application or in the amount of information supplied to the ACCC about the proposed line rental increase and its implications for low income customers. Consequently the ACCC could not satisfy itself that Telstra had complied with its obligations to consult low income consumers, and asked Telstra to address a number of concerns.
"This request, in effect, required Telstra to make a fresh application. It is Telstra's second application to which the ACCC has given consent.
"The ACCC expects Telstra to provide substantially cheaper telephone calls in real terms if it is to continue to raise line rental charges. The ACCC will be closely assessing call costs when it examines Telstra's price control report at the end of each financial year".
The Government's 2002 Price Control Determination and changes to Telstra's carrier licence require Telstra to offer a low-income package to its customers. This package must be approved by the Low-Income Measures Assessment Committee (LIMAC), comprising consumer advocacy groups appointed by the Minister for Communications, Information Technology and the Arts. This group has now endorsed Telstra's package and is consulted on changes to that package.