[LINK] last mile rent

[stephen at melbpc.org.au]

ACCC rejects Telstra appeal

Mitchell Bingemann | April 29, 2009 
http://www.australianit.news.com.au/story/0,24897,25403127-15306,00.html


THE competition watchdog has rejected a final appeal from Telstra to 
charge its rivals $30 a month to use the telco's last mile copper network.

For over five years Telstra has lobbied the Australian Competition and 
Consumer Commission (ACCC) to impose the flat monthly access fee on other 
telcos who wish to use its last mile access network to deliver telephony 
and internet services to customers in metropolitan areas. 

Telstra's competitors currently pay approximately $17 a month to access 
the telco's copper network. 

A rise in the monthly charge would effectively outprice Telstra's 
competitors from offering telephony and internet services at competing 
rates. 

But yesterday the ACCC knocked back Telstra's appeals, describing the 
charge as unreasonable. 

"Following an extensive assessment of Telstra's undertaking, including 
Telstra's own cost model, the ACCC is not satisfied the $30 charge for 
metropolitan areas is reasonable," ACCC chairman Graeme Samuel said. 

Telstra requested the charge be imposed on rental costs for the 
Unconditioned Local Loop Service (ULLS) which governs about 70 per cent 
of the 10 million telephony lines in metropolitan Australia. 

ULL services allow Telstra's competitors to use its copper network 
without any dial tone or carriage service. The services are the 
underpinning of naked DSL, a high-speed broadband offering that does not 
require a telephone connection to access the internet. 

"The ACCC believes that Telstra's proposed price is unlikely to promote 
competition in the broadband and telephony markets. It may also 
discourage investment in telecommunications infrastructure," Mr Samuel 
said. 

The ACCC believed the monthly payment would result in Telstra recovering 
more revenue than was necessary to provide access to its copper. 

It said the cost was significantly above estimates derived from 
comparative markets. 

Since 2004, Telstra has submitted four undertaking applications that have 
sought the regulator to impose the rental charge to rivals. All have been 
rejected. 

Telstra rival Optus applauded the ACCC's decision but said more 
regulatory reform was needed to ensure competition flourished in the 
telecommunications sector. 

"While we welcome the ACCC's decision, in relation to Telstra's ULL price 
undertaking, it yet again highlights the need for fundamental reform of 
the regulatory regime," Optus regulatory affairs general manager Andrew 
Sheridan said. 

"We've heard rumours of a new, conciliatory approach by Telstra. We 
challenge Telstra to accept the umpire's decision and to demonstrate 
through action its new ‘conciliatory' approach to government and 
regulation." 

A Telstra spokesperson said the company was considering the decision. 

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Cheers,
Stephen