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Telstra’s price increases rejected by competition tribunal

Telstra has had their request to increase costs for access to the telco’s copper fixed line network rejected by the Australian Competition Tribunal.

Telstra Price AustraliaThe Competition Tribunal reviewed and upheld the decision by the Australian Competition and Consumer Commission rejecting Telstra’s request to almost double the monthly wholesale costs for access to the ‘unconditioned local loop service’ (ULLS – the copper phone line connecting the exchange to your house/business) from $16 to $30.

The Australian Competition Tribunal slammed Telstra’s costing model, concluding it only reasonable that pricing for the ULLS ”should be priced on the basis of the up-to-date costs of replacing a historical relic while keeping most of its essential design features and merely updating its equipment”.

The ACCC was quick to highlight the ACT’s decision as reason for their review into existing wholesale arrangements with Telstra.

”Ensuring access seekers can utilise the unconditioned local loop service at reasonable prices, with certainty, continues to be essential to promote competition in broadband and voice services,” ACCC chairman Graeme Samuel said.

Optus has come out in support of the ACT’s line of reasoning, with the telco critical of attempts by Telstra to price access costs of existing infrastructure as if it was new, rather than fully depreciated. In a letter obtained by The Australian, Optus is critical of the approach taken by Telstra when dealing with the ACCC’s review on wholesale pricing.

“Telstra is using this review as another avenue to raise access prices by seeking to entrench a high-cost methodology, albeit under the guise of a new approach,” Optus says.

“Telstra’s scheme fails to reflect past compensation and would allow it to recover network costs many times over by overcharging its competitors and their customers.” The letter reads.

David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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