ACCC begins consultation on setting access prices for Telstra's fixed line services and transmission services
- Written by ACCC
24 July 2014: The Australian Competition and Consumer Commission has today released a discussion paper seeking views on setting primary prices for the regulated fixed line services supplied using Telstra’s copper network.
This consultation is part of the ACCC’s inquiry into making final access determinations (FADs) for the seven regulated fixed line services. The primary prices are the monthly and usage charges paid for the regulated services and include charges for access services (such as the unconditioned local loop service) and for resale services (such as wholesale line rental and wholesale ADSL).
The ACCC uses a building block pricing method to set primary prices for the regulated fixed line services and has obtained expenditure and demand forecasts for the next five years from Telstra. Extracts of Telstra’s forecast information are published on the ACCC website and access seekers are able to obtain the full confidential version of Telstra’s forecasts and report.
“The ACCC is seeking views on several complex pricing issues it will consider during the FAD inquiry,” ACCC Commissioner Cristina Cifuentes said.
“These issues include an assessment of Telstra’s expenditure and demand forecasts, approaches to the allocation of costs to access services, the impacts of declining demand and the impact of Australia’s transition from Telstra’s copper network to the NBN.”
Submissions on the discussion paper are due by 26 September 2014. The ACCC expects to release a draft decision on the fixed line services FADs for comment in late 2014 and will consider whether there is a need to consult further before releasing its draft decision. The ACCC expects to make its final decision by mid-2015.
The discussion paper and further information on the ACCC’s fixed line services FAD inquiry are available at the Final Access Determination Inquiry webpage.
The ACCC has also commenced consultation on the primary price terms for the Domestic Transmission Capacity Service (DTCS) to be included in the DTCS FAD.
The DTCS discussion paper reviews the domestic benchmarking approach that was used in the 2012 DTCS FAD. The ACCC adopted this approach because prices on competitive DTCS routes provide a good guide to the prices that should prevail on non-competitive (regulated) routes.
“The ACCC is seeking input from stakeholders on a range of issues relevant to the price terms that will apply to the DTCS,” Ms Cifuentes said.
“In particular, we are interested in views about the continued use of the domestic benchmarking approach and whether there are other suitable methodologies that might be considered in pricing the DTCS.”
The ACCC is also seeking comment on how stakeholders might best participate in developing prices for the DTCS and, if domestic benchmarking is the preferred approach, how the regression model can be refined and improved. Stakeholders will have the opportunity to comment on the approach that is adopted to set prices as the Inquiry progresses.
Stakeholder responses to this consultation will be accepted until Friday 12 September 2014. Further information on the 2015 DTCS FAD inquiry is available on the 2015 DCTS FAD webpage.