ACCC cracks down on Telstra wholesale ADSL pricing

ACCC cracks down on Telstra wholesale ADSL pricing

Cost of supply for ISPs acquiring wholesale ADSL services from Telstra will be lower as a result of the watchdog's 'service declaration'

The Australian Communications and Consumers Commission (ACCC) will exercise more power over wholesale ADSL service pricing aimed at tackling Telstra’s dominance in that market.

The consumer watchdog noted current competition in the supply of ADSL services is not effective. It has issued a 'service declaration' which allows the ACCC to determine the price of the affected services and to create a more levelled playing field.

Telstra competitors such as Optus, Internode, iiNet and Primus Telecom have long complained about the telco’s stranglehold on the wholesale broadband industry.

The problem is exacerbated in regional areas where it owns nearly all communications infrastructure and stonewalls competition.

“Declaration will remove impediments to competitive ISPs gaining access to Telstra’s national ADSL2 network on efficient terms in order to supply retail services, including to around 11 per cent of premises where Telstra’s network architecture has prevented competitors from using [its] infrastructure,” the ACCC said in a statement.

Cost of supply for most ISPs acquiring wholesale ADSL services from Telstra will be lower as a result.

The declaration dictates interim wholesale ADSL price per customer in metro areas to be $25.40 along with $30.80 in rural and regional.

ISPs will be able to access domestic backhaul at $45.50 per Mbps which drops down to $33.65 per Mbps from July 2012.

These prices are set for the next 12 months.

"As a result of these decisions, end-users can expect to have access to a greater range of competitive fixed-line broadband internet service offerings," ACCC acting chairman, Michael Schaper, said in a statement.

The watchdog has commenced an inquiry for a final access determination for wholesale ADSL services which will consider a more permanent pricing table and other conditions.

The ACCC is inviting public submission on the final access determination until March 30.

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