[LINK] ACCC reduces ADSL wholesale prices

[stephen at melbpc.org.au]

Internet bills set to be cut as Telstra faces $55m loss 

February 15, 2012. By Paul Budde

Australian households are set to save about 10 per cent on their monthly 
internet bill, a telco analyst says, after the competition watchdog 
reduced prices on Telstra's wholesale network.

The ACCC announced yesterday its ruling to "declare" Telstra's wholesale 
ADSL service under the Competition and Consumer Act 2010. The ruling 
forces Telstra to reduce the wholesale price which ISPs like Internode 
and iiNet pay it in order to resell ADSL and could see it lose about $55 
million a year in revenue.

"As a result of these decisions, end-users can expect to have access to a 
greater range of competitive fixed-line broadband internet service 
offerings," acting ACCC chairman Michael Schaper said.

The ACCC set interim ADSL wholesale prices of $25.40 a month in cities 
and $30.80 a month in regional and rural areas, plus a capacity charge, 
and will set final prices after an inquiry. In some cases the new prices 
will mean ISPs save about $7 a month on providing a customer's ADSL 
connection.

Telecommunications expert Paul Budde said the decision meant ISPs which 
used Telstra’s network would lower the price of retail ADSL broadband 
plans due to the wholesale discount.

"I definitely think ... the money won’t simply go into the pockets of the 
ISPs but ... will flow through [to the customer], through better prices 
because of the competitive nature of the market at the moment," Budde 
said.

He said it was difficult to predict how much the discount for consumers 
would be on their monthly broadband plans but estimated bills could be 
shaved by about 10 per cent, in some cases more. "I wouldn't be surprised 
if you saw something like a $5 discount or something like that on the 
monthly fee."

iiNet chief regulatory officer Steve Dalby said the ruling would 
mean "either better prices, more value adds or both".

"... We'll be looking at quota and data hungry applications like FetchTV 
to see what impact [the ruling] makes on our costs and therefore the 
plans we offer and where they might change."

The ACCC ruled retail internet service providers must have fair and 
transparent access to the nation's fixed broadband lines.

"The ACCC considers that this will promote the long-term interests of end-
users of fixed-line broadband internet services throughout Australia," it 
said in a statement.

In recent years, several retail internet providers have complained to the 
ACCC over their access to Telstra's wholesale network.

"Despite the deployment of competitive broadband infrastructure in some 
areas over the past decade, competition in the supply of ADSL services is 
not effective," the ACCC said.

The ACCC said its interim determination set out terms and conditions of 
access for the next 12 months.

Telstra has been surprised by the ACCC's strong stance on wholesale 
broadband prices. A spokesman yesterday said the company was "assessing 
the implications of this decision for our business".

"Telstra is disappointed by the ACCC's decision to declare wholesale DSL. 
Telstra does not believe that market conditions justify increased 
regulation of Telstra's copper network at this time," the spokesman said. 
The company also issued a statement to the ASX expressing its 
disappointment today.

The decision comes before the ACCC's decision on Telstra's proposed 
separation of its retail and wholesale network as part of the telco's 
deal with the government and NBN Co.

Reports have suggested a decision on Telstra's structural separation was 
expected before the end of February.

With AAP and Lucy Battersby

 This reporter is on Facebook: /bengrubb

Read more: http://www.smh.com.au/technology/technology-news/internet-
bills-set-to-be-cut-as-telstra-faces-55m-loss-20120215-
1t4t7.html#ixzz1mejeCfX2

Cheers,
Stephen