0

What price, the last mile?

This week the ACCC reached a draft decision on how much access seekers should pay Telstra for fixed line services on Telstra’s network. As usual, everyone is disappointed. Telstra had argued that prices should rise (by more than 7 percent), their competitors hoped to see them fall. In fact, they did fall, but only by an average of 0.7 percent.

In the past the argument has tended to be around the total cost of providing the network. This time round, it’s as much to do with how the costs are apportioned. Over the period in which this new regulatory price is in force Telstra expects a 60 percent decline in the number of services, as customers move to the NBN or move off fixed line services altogether.

That raises two questions, both addressed in this week’s Crosstalk:
– Shouldn’t the impact of the lost revenue by shared across all access seekers; and
– Wouldn’t the losses associated with the decline already be covered in the compensation provided in Telstra’s definitive agreement with NBN
In this week’s podcast we hear from:
– Rod Sims, chairman of the ACCC
– Jane Van Beelen, executive director, regulatory affairs at Telstra
– John DeRidder, telecommunications economist

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to top