Fixed line services decision leads to one-off uniform fall in access prices of 9.4%

The Australian Competition and Consumer Commission (ACCC) has released its final decision on the prices that other operators pay to use Telstra's copper network to provide telecommunications services to consumers.

The final decision will require a one-off uniform fall of 9.4 per cent in access prices from current levels for the seven fixed line access services. This revises the 9.6 per cent fall estimated in the June further draft decision. The new prices will apply from 1 November 2015 until 30 June 2019.

"The ACCC has dealt with a number of complex issues during this inquiry, including the unique circumstances of the transition from Telstra's copper network to the NBN. Our final decision on prices is the result of a number of considerations, with downward pressures more than offsetting upward pressures," ACCC Chairman Rod Sims said.

"Downward pressures largely come from lower expenditures, falling cost of capital, the treatment of the effects of migration to the NBN and updated information on the NBN rollout. These more than offset upward pressures from a shrinking fixed line market due to consumers moving away from fixed line services and to mobile services," Mr Sims said.

"Importantly, users of Telstra's network should not pay the higher costs that result from fewer customers as NBN migration occurs. If there is no adjustment for these higher costs then customers who have not yet been migrated to the NBN will ultimately pay significantly higher prices for copper based services," he said.

"The ACCC has taken this approach because it considers that users of the fixed line network have not caused the asset redundancy and under-utilisation and will not be able to use those assets and capacity in the future. It would not be in the long term interests of end users for costs to be allocated to users of the network who do not cause them, particularly when Telstra has an avenue to recover those costs," Mr Sims said.

NBN Co released new information on its rollout plan in August 2015 and the ACCC's decision accepts Telstra's expenditure forecasts subject to updating for that latest information. The allowed expenditure is also subject to exclusion of the capital and operating expenditures that are specific to the NBN and which should not be recovered from users of the copper network.

The ACCC's final decision also covers connection and disconnection charges and a decision to not exempt the CBD areas from coverage under the final access determinations.


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