Telstra loses fixed access pricing court challenge

Telstra has been defeated in a court challenge to the ACCC’s demand for the operator to reduce wholesale prices on its copper network.

The Federal Court of Australia has dismissed Telstra’s application for a judicial review of the ACCC’s 2015 final access determinations for Telstra’s fixed-line network.

These determinations required Telstra to decrease access prices by 9.4% for the seven declared fixed-line access services, including access to Telstra’s copper network by retail ISPs.

In the legal challenge, Telstra claimed that the pricing decision would lead to it losing money on the supply of fixed-line access services. Wholesale revenues from its copper network are dwindling as the company transfers parts of it to the NBN and as more end users migrate to the national network.

But the ACCC had taken the view that users of Telstra’s network should not have to pay the higher costs that result from the NBN migration as they are not the cause of the asset redundancy or under-utilisation issues. As a result, it is not in the interest of end users for Telstra to pass the costs on to retail providers.

The court has now rejected all of Telstra’s grounds for review of the decision. “The ACCC’s determinations meant that the remaining users of Telstra’s network shouldn’t pay higher costs due to a shrinking customer base on the copper network as others migrate to the NBN,” ACCC Chairman Rod Sims said.

“The ACCC considered that Telstra had an opportunity to be compensated for such costs under its migration arrangements with NBN Co, and is receiving payments for customer disconnections… Today’s decision will help provide some predictability and stability in access prices over the four-year period of the determination while the NBN rollout is completed.”

Separately, the ACCC has issued a draft decision to reject nbn’s proposed variation of its special access undertaking (SAU) — stipulating prices and terms for the supply of wholesale services up until 2040 — to incorporate new technologies such as fibre-to-the-node or hybrid fibre coaxial (HFC).

The company will be required to alter its SAU to incorporate these new technologies added under the Coalition’s revised multitechnology mix model for the network. But the ACCC is not satisfied with the proposed terms.

“Most of the changes proposed by nbn co would remain in effect until the end of the SAU term in 2040. We need to be satisfied that the proposed changes are reasonable and in the long-term interests of end users now, and will remain so over the term of the SAU,” Sims said.

He said the ACCC’s concerns relate to three matters, including a proposed change that would allow future technologies to be added to the mix without having to further revise the SAU.

The other concerns involve the proposal to remove the definition ‘network boundary point’ from service definitions and the proposal to add provisions that would allow nbn to provide lower data rates in certain circumstances for the rest of the term of the undertaking.

Sims said because the ACCC can only accept or reject the proposed SAU, the regulator’s draft decision is to reject it.

Pictured: ACCC Chairman Rod Sims.

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