Telstra $9 Fee Rejected
The Age
Saturday June 3, 2006
THE price Telstra charges its broadband competitors to use its telephone lines may fall significantly following a crucial ruling against it by the Australian Competition Tribunal.
The judgement relates to line sharing, which allows voice and data services to be provided simultaneously on a single copper telephone line. This involves Telstra using the "lower half" of the line's spectrum for telephone calls, while a competitor can use the "upper half" to provide ADSL broadband. In December 2004 Telstra sought permission from the Australian Competition and Consumer Commission to charge its competitors a $9 monthly fee for line sharing, which the ACCC rejected. The telco appealed against the decision to the Australian Competition Tribunal, but yesterday was told the tribunal considered the $9 fee "not reasonable". Justice Alan Goldberg, the tribunal president, agreed with the ACCC's criticism of the way the fee was calculated. Telstra based the fee on the cost of line sharing divided by the number of line-sharing services it sold to its rivals, and did not include the number of line-sharing services offered by Telstra to its customers. "Telstra's approach to allocating costs is likely to distort the relative prices of the LSS (line-sharing service) and other wholesale options available to access seekers such as Telstra's wholesale ADSL service," the tribunal said in its ruling. ACCC chairman Graeme Samuel said: "The ACCC is heartened by the tribunal's decision to reject this access undertaking, and will carefully be considering its implications for the ACCC's ongoing regulatory functions." Telstra spokeswoman Liz Jurman said the tribunal's decision was "insignificant" because of the low popularity of line sharing - which is used only by Primus and PowerTel - compared with its unconditioned local loop (ULL) service. ULL involves Telstra's competitors using the whole line, enabling them to offer phone calls and ADSL broadband. "The decision has limited precedent value for other services, because service-specific costs (criticised by the tribunal) for ULL are a small, small fraction of the total cost," Ms Jurman said. Telstra made a submission to the ACCC in December to allow it to charge a $30 flat monthly fee. No judgement has been reached.KEY POINTS ? A competition tribunal has rejected Telstra's planned $9 fee for line-sharing access.? The decision will reduce the price Telstra charges some competitors to use its lines.
© 2006 The Age
