On 3 March 2011, the Australian Consumer & Competition
Commission ("ACCC") issued its
Interim Access Determination
("Determination"), ending the freeze on
wholesale access prices for access to Telstra's copper network.
The freeze has been in place since December 2009 to enable the ACCC
to review the way the prices were calculated. The Determination is
the first telecommunications pricing decision made by the ACCC
under new laws that restrict Telstra's ability to challenge the
ACCC in the Federal Court and High Court. The ACCC has said that
the Determination will promote industry stability during the
transition to the NBN.
2. Key changes
The key changes introduced by the Determination are the:
reduction of Telstra's monthly wholesale line rental
changes by nearly $5 (reduced to a national flat fee of $22.10 from
$25.57 for homes and $26.93 for businesses); and
removal of the distinction between city, urban and regional
areas, with the ACCC setting a single access price for the
unconditioned (or unbundled) local loop
("ULL") of $16 per month for CBDs,
metropolitan areas and regional areas.
The single price set by the ACCC is the same as the previous
Band 2 (Metropolitan) pricing. However, this represents an increase
of almost $10 to the former Band 1 (CBD) pricing and a decrease of
just over $15 to the Band 3 (Regional) pricing.
While these prices do not affect Telstra's costs, the
pricing could discourage competitors from serving customers if the
ULL price is too high, because it increases retail prices. In
addition, these changes mean that the ACCC has effectively reduced
the value of Telstra's copper network and cut Telstra's
fixed-line revenue by millions of dollars.
The Determination applies retrospectively from 1 January 2011
and will be replaced by a final determination by the end of
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In some cases these fees or surcharges are higher than what a bank charges to these merchants for use of the system.
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