Optus, MacTel, AAPT slam Telstra's congestion price plan

Optus and Macquarie Telecom have joined other ISPs in slamming Telstra's suggestion that network congestion be priced into regulated wholesale ADSL charges.

Five ISPs made submissions to the Australian Competition and Consumer Commission (ACCC)'s request for information on September 5. (pdf)

The ACCC is overseeing a lengthy public inquiry process ahead of making a final access determination for wholesale ADSL services.

Telstra surprised the ACCC when it introduced the concept of "congestion pricing" in an August submission (pdf), prompting the commission to seek comment from rival ISPs.

The incumbent effectively asked the ACCC to increase wholesale ADSL prices "to assist with the management of network congestion" and provided extensive economic analysis to justify the proposal.

Telstra's rivals attacked the notion, arguing that costs associated with network congestion would already be included in the network capacity access charge that access seekers pay — the Aggregating Virtual Circuit (AGVC).

AAPT argued that the "sum payment of of AGVC charges ... and access charges, is more than sufficient compensation for Telstra to invest in backhaul capacity to ensure that congestion is effectively managed".

"To impose a congestion charge as Telstra proposes, would amount to double-dipping," the carrier noted in a submission. (pdf)

AAPT was scathing of the congestion charge proposal: "AAPT is at a loss to understand what problem Telstra's proposal to impose a congestion charge is intended to address.

"Even if there were indeed a congestion issue as Telstra proposes, AAPT does not understand why Telstra is only raising it now, at this late stage of the inquiry."

Optus argued in its submission that Telstra appeared to have a double-standard on transmission capacity — investing in it to underpin NBN services, while arguing there was not enough of it to sustain ADSL services.

"Optus submits that such positioning appears to reflect an element of regulatory gaming – on the one hand providing adequate capacity to some access seekers; while claiming inadequate capacity for other access seekers relying on regulated access," the telco said. (pdf)

Macquarie Telecom was more blunt in its assessment.

"Macquarie submits that Telstra's submissions concerning congestion pricing to the ACCC are clear evidence of Telstra gaming the ACCC's inquiry process," it stated. (pdf)

Further, Macquarie Telecom panned Telstra over the secretive nature of the congestion pricing proposal. Large sections of Telstra's submission have been redacted under commercial in-confidence clauses.

Herbert Geer, which made a detailed submission on behalf of iiNet and Adam Internet, argued that increasing prices "in the manner that Telstra suggests is inconsistent with the economic theory that Telstra itself relies on".

"It is submitted that WDSL pricing already accounts for congestion to the maximum extent possible given that it is not possible for Telstra to charge wholesale customers for usage," Herbert Geer stated. (pdf)

"In light of this, it would seem clear that the ACCC should not artificially inflate WDSL prices as a way of dealing with congestion."