Local carriage services pricing principles 2002

Project overview

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The local carriage service (LCS) is a service for local call resale. That is, for the carriage of telephone calls from customer equipment at an end-user’s premises to separately located customer equipment of an end-user in the same standard zone.

The ACCC declared the LCS in August 1999 and at that time indicated it would be likely to adopt a retail-minus methodology to determine an access price in the event of a LCS access dispute or when assessing a LCS undertaking. The retail-minus methodology determines the LCS price by subtracting retail costs from the retail price of a local call.

The ACCC has been notified of nine disputes in relation to the LCS since declaration, all of which were resolved by commercial negotiation. In each case price was one of the main issues in contention. To help develop principles that could be used in resolving each of those disputes, and more broadly, in April 2000 the ACCC released a draft report.

In November 2000 a final report was issued indicating that the retail-minus approach was likely to be the ACCC's approach to pricing the LCS. The revised final report issued in April 2002 confirms that approach and includes indicative prices.

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