The consumer watchdog has rejected Telstra’s case for increasing the prices rival telcos pay to use its copper network for their fixed-line services, instead telling the company it should drop its prices by 0.7%.
Telstra had wanted to increase prices by 7.2%.
The Australian Competition and Consumer Commission released its draft decision on the copper network pricing yesterday. The decision will cover the period for July 1, 2015 to June 30, 2019.
The NBN will soon replace Telstra’s copper network with a fibre broadband network, making it obsolete.
“The draft decision on prices ensures nominal price stability in the wholesale market for telecommunications services and will promote competition in the transition to the NBN,” ACCC chairman Rod Sims said in a statement.
Sims said the ACCC had made the decision with two conceptual underpinnings.
“First, Telstra will no longer bear all the costs of declining consumer demand for fixed line services,” said Sims.
“Second, however, access seekers will only pay for the assets needed to supply them, and not for any under utilisation caused by the NBN.”
Telstra’s released a statement saying it should have the opportunity to fairly recover its actual costs across all users of the copper network.
“We are still reviewing the (ACCC) document, but it is disappointing the ACCC is proposing to remove infrastructure costs from the asset base as a result of the NBN, which will prevent recovery of costs fairly across all users of our network,” said Jane van Beelen, executive director of regulatory affairs, according to The Australian.
“NBN Co has not compensated Telstra for these costs.”
Kirsten Robb is a former journalist at SmartCompany. Previously, she worked at News Corp as a property reporter for Leader Newspapers and the Herald Sun, and holds a Masters of Journalism at Melbourne University.
