Telcos pile on Telstra in ACCC wholesale price fight

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Telcos pile on Telstra in ACCC wholesale price fight

Telstra's rivals dive into legal battle.

Telstra is facing an army in its legal fight with the competition watchdog over the ACCC's decision to lower the telco's wholesale access charges, with three more of its rivals joining the court battle.

A case management hearing today revealed managed hosting and telco provider Macquarie Telecom, telecommunications wholesaler Telcoinabox and IP voice network operator Symbio Networks had applied to join the lawsuit as backers to the ACCC.

Last December, Telstra rivals TPG and Optus similarly opted to back the ACCC in the case.

Justice Foster today allowed the trio to join the proceeding. Telstra similarly said it was content for its three rivals to jump in as respondents to the suit.

The case centres on the ACCC's October ruling that Telstra drop the fees it charges its wholesale partners to access its fixed-line copper network by 9.4 percent.

In its ruling, the ACCC rejected Telstra's push for a 7.2 percent rise in the fees - which the telco said was necessary to account for rising costs from users leaving its network for the NBN - in favour of the 9.4 percent decrease.

At the time the ACCC said end users could be lumped with "absurd pricing" should the wholesale prices not be dropped.

The ruling means prices will fall across the seven fixed-line access services from November 1 this year until June 30 2019.

Telstra lodged its push for a judicial review of the ACCC decision soon after in November.

It argued that the ACCC had not followed its own fixed pricing principles by allowing Telstra the opportunity to recover the costs of providing services to its wholesale customers.

The ACCC and Telstra's rivals argue the telco is being fairly compensated through the $11.2 billion definitive agreements it signed with the government for its copper and HFC networks.

Optus has previously argued [pdf] Telstra could very likely be overcompensated for the provision of fixed-line services should the ACCC not drop wholesale charges, given many of the assets Telstra uses to provide retail and wholesale services are also accessed - and paid for - by NBN Co.

Industry group for tier two telcos, the Competitive Carriers Coalition, also last year labelled Telstra's push for a 7.2 percent increase in wholesale access charges 'double dipping'.

“Telstra negotiated a handsome payout from NBN for migrating customers off this equipment – billions of dollars in taxpayer money," CCC chairman Matt Healy said at the time.

“Asking the ACCC to allow it to increase charges to people still using the old copper network to compensate Telstra again for the loss of scale caused by migration to the NBN was the height of cheek.”

A hearing between the parties is set down for March 3.

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