ACCC sets ULLS pricing: Primus 'Justice has finally been done'
- 18 January, 2008 17:24
The Australian Competition and Consumer Commission has published its final determinations made in the arbitration of disputes over access to the Unconditioned Local Loop Service.
The ULLS final determination specifies the monthly rental charge of $14.30 per service per month in metropolitan band 2 for 2007/2008 for which Telstra supplies the ULLS to Primus Telecom. This follows the parties being unable to agree on the ULLS monthly charge, and Primus notifying a dispute for ACCC arbitration.
Telstra had proposed a $30 per service per month ULLS rental charge in all bands. Both the ACCC (August 2006) and the Australian Competition Tribunal (May 2007) were not satisfied that this price was reasonable. Despite these rulings, Telstra had continued to require access seekers to pay $30 per month.
Primus Australia's chief executive officer and managing director, Mr Ravi Bhatia said that the company had been paying Telstra the old rate of $30 per month describing this as "an overpayment of between $7-8 million" which will be returned to Primus by Telstra.
"It's a very perverse thing, but justice is finally being done," said Bhatia. "Telstra has had use of this money for the last two years, which has deprived Primus of important investment opportunities -- whereas Telstra has benefited from a no interest loan by Primus."
"The setting of reasonable terms of access for the ULLS and LSS continues to bring significant benefits to consumers of telecommunications services," ACCC chairman, Mr Graeme Samuel, said in a press release. "The prices set by the ACCC will ensure that consumers receive higher quality services at more reasonable prices from a greater range of service providers.
Bhatia believes the ACCC has been cautious saying he thinks it's a very well thought out decision. "It is the right decision, appropriate and critical -- with a neutral umpire. The price of $14.30 looks reasonable. I respect what the ACCC does. They have had a good look and it's not a bad price.
"One hopes this decision will lead to fruitful discussions. This rental charge expires in June 2008, and the negotiations will all reopen again at that time. This underscores that this process of negotiation needs to be done differently," he said.