Telstra Back In Line Of Fire
The Age
Saturday February 4, 2006
TELSTRA stepped into the political firing line again yesterday, warning wholesale customers that within two months it would begin charging an average $30 per customer per month for access to its copper phone lines, and releasing its suggestions for operational separation of the corporation.
The announcement flies directly in the face of the Australian Competition and Consumer Commission's view that, to maintain healthy competition, "de-averaged" pricing, ranging from $7 per customer per month in capital city business districts to $144 per customer per month in rural areas, was the way to go.Telstra will apply the average $30 pricing model within two months, the ACCC is likely to reject it, Telstra will appeal against that decision, and the ball will go to the lawyers, with the final outcome not known for months.Telstra spokeswoman Liz Jurman said the $30 charge "just about meets Telstra's costs" and was a fair price for the service.Telstra chief executive Sol Trujillo has firmly favoured averaged pricing since he took over last July 1, saying that if customers across the country were to be charged the same retail prices, then the cost of wholesale access should also be averaged.Yesterday's announcement was not greeted with universal acclaim, which did not surprise Telstra. However, it expects regional internet service providers and small telecommunications resellers to welcome the significant drop in their wholesale cost of access to the unconditioned local loop (the copper wires without dial tone), by which they retail broadband, local and long distance telephone calls and data transmission.But the new pricing, due to come into force in about two months, is a significant increase in costs for Telstra Wholesale's customers in urban areas. In capital city business districts, de-averaged pricing favoured by the ACCC ranged from $7 in capital city central business districts to $13 per customer per month in the metropolitan suburbs. Telstra's thoughts on dividing the corporation into three operationally separated divisions - retail, wholesale and network - fill 26 pages and will be considered by Communications Minister Helen Coonan, who late last year asked Telstra to formulate the plan.The draft provides for "one or more business units" separating wholesale, retail and key network services. Senator Coonan's office made no comment on the details of either the operational separation plan or the copper network access pricing. Opposition telecommunications spokesman Stephen Conroy attacked the plan, saying it was "a sham" and "little more than a costly PR exercise" that would create more bureaucracy and not "constrain Telstra's ability to act anti-competitively."
© 2006 The Age
