ACCC draws mixed response on $16 copper access

Flat price structure.

The competition watchdog's interim decision to set a flat $16 a month charge for most wholesale access to Telstra's copper network has attracted a mixed response from the industry.

The Australian Competition and Consumer Commission yesterday altered its approach to unconditioned local loop service (ULLS) prices, cutting those in regional areas while raising costs for line access in the CBD.

The ACCC set a flat copper access fee of $16.00 for Bands 1 to 3 exchange service areas – roughly translated as CBD, non-CBD metropolitan and regional areas respectively.

It meant no change for Band 2 exchange area fees (metro areas where there were more than 108.4 services in operation per square kilometre); however, band 1 (CBD) prices rose from $6.60 while Band 3 (more than 6.54 services per square kilometre) costs fell from $31.30 to $16.

In June 2010, there were over 690,000 active ULLS services across Bands 1, 2 and 3, the ACCC reported.

The interim prices were backdated to commence on January 1 this year and expire at the end of December. They could still be varied before a final access determination is handed down, the ACCC said.

"Today marks the first step in implementing the new telecommunications access regime," ACCC chairman Graeme Samuel said in a statement.

"The ACCC has now set interim price and non-price terms for the six fixed line services.

"While parties are still able to negotiate their own terms and conditions, the interim access determinations establish a benchmark for Telstra and access seekers to fall back on when negotiating terms and conditions."

iiNet welcomed the determination, saying it was "largely in line with expectations" and "would provide certainty for customers".

"iiNet views this interim determination as positive to both our customers and competition in the Australian market," chief executive Michael Malone said.

"The decision will provide wholesale price certainty in the lead up to the NBN but was not expected to materially impact FY11 guidance."

Meanwhile, Optus regulatory affairs general manager Andrew Sheridan said the telco was "disappointed by the ruling as it is a wasted opportunity to ignite further competition as we head towards the level playing field of a NBN world."

"We continue to urge the ACCC to provide access prices that better reflect the real costs of supply that Telstra incur," Sheridan said.

A Telstra spokesman did not have formal comments to make on the determination at the time of publication.