18 February 2008

Telstra defines broadband boundaries

TELSTRA'S stoush with the competition regulator over the cost of broadband services has narrowed, with the telco giant submitting price undertakings that would cover only 70 per cent of Australia's population.

Telstra has proposed an access charge of $30 per month for Unconditioned Local Loop Service, which would allow customers to sign up to a rival telco for voice and broadband services without needing a Telstra phone line.
ULLS, also known as unbundled local loop service, effectively means Telstra's competitors would be able to use the company's own copper wire network to poach its customers.
However, no agreement has yet been reached on the price Telstra will be able to charge its rivals for access despite the network having been "declared" open to third-party access under the Trade Practices Act as long ago as 1999.
The ULLS proposal Telstra has lodged with the Australian Competition & Consumer Commission covers only metropolitan areas, leaving open the question of third-party access prices in rural and regional areas.
Telstra last year proposed a $30 across-the-board access charge for customers regardless of location, but this was rejected by the ACCC on the grounds that it did not accurately reflect the cost of providing the service.
The decision, which was challenged by Telstra before the Australian Competition Tribunal, was upheld in May this year.
A Telstra spokesman said yesterday that while Telstra had yet to formulate access prices for central business district, provincial and rural areas, customers in this last category would be forced to pay at least $100 per month due to the ACCC decision to reject its $30 flat charge plan.
The new price regime, which is proposed to apply until the end of 2010, is based on a confidential pricing system that Telstra refers to as its Efficient Access Model, which uses data on actual customer location and network structures rather than the previous plan, which relied on assumed customer characteristics.
Telstra has offered to share the model with competitors for assessment, subject to confidentiality arrangements being put in place.
The ACCC plans to issue a discussion paper seeking submissions on Telstra's undertakings and is scheduled to report its findings within six months.
However, Telstra's High Court challenge to the constitutional validity of the ACCC's power to force it to share its infrastructure with other providers, which is awaiting judgment, could make the entire process redundant if the court rules in favour of Telstra.

Blair Speedy December 28, 2007

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