Optus joins telco fury over govt wholesale access intervention

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Optus joins telco fury over govt wholesale access intervention
Communications minister Malcolm Turnbull.

TPG wants cheaper copper now to compete with NBN.

Optus has raised concerns over the decision by Communications Minister Malcolm Turnbull's department to support incumbent Telstra against proposed lowered wholesale access prices for its copper network.

In a letter [pdf] to the Australian Competition and Consumer Commission, the telco's head of interconnect and economic regulation, Andrew Sheridan, disputed Telstra and the Department of Communications' arguments against lowered copper wholesale prices as "incorrect" and "overstated".

Telstra can recover all costs under the regulator's detailed modelling, and the decision won't affect the incumbent's ability to invest, Sheridan said. 

He suggested the DOC appeared to have misunderstood the regulator's work over the past two years on pricing and cost allocation.

The unprecedented move by communications secretary Drew Clarke urging the regulator to rethink lowered wholesale copper pricing resulted in a furious response last week from Vodafone, Macquarie Telecom, iiNet and Myphone, which demanded minister Turnbull direct his department to withdraw the submission.

Sheridan and Optus are also protesting what they see as inappropriate intervention by the government.

"This intervention is unlikely to build confidence in the policy settings surrounding the NBN. At the core of the Department’s submission is the request that access prices be kept high now so that consumers don’t face any price changes when they migrate to the NBN.

"This proposition is inconsistent with consumer interests and the matters that the ACCC has to take into account in setting access prices," he wrote.

Sheridan said lower wholesale copper pricing would not hinder carrier development of and customer migration to the NBN, a position echoed by rival telco TPG that also expressed concerns with the DOC's submission [pdf].

Despite the department's claims, carriers are best served by lower access prices for the copper network now, as this would reduce their costs as they seek to win NBN customers.

"The migration event is an important one and all carriage service providers are competing heavily to make sure that they get their share of the NBN migrations.

Even today, the costs of supplying an NBN service are higher than the costs of supplying a copper-based service, but this is not stopping all carriage service providers from trying to win customers to their NBN services," TPG wrote.

iTnews has contacted the Department of Communications for comment on the matter.

ACCC is expected to make a final decision in September on the wholesale pricing for Telstra's fixed-line copper network.

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