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ACCC Refuses Telstra's VOIP Revenue Grab |
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Written by Adam Gosling
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Tuesday, 12 September 2006 |
The Australian Competition and Consumer Commission issued a draft
decision rejecting Telstra's PSTN Originating and Terminating Access Services
and Local Carriage Service undertakings.
Telstra had proposed to lower the Local Carriage Service pricing
in exchange for significant increases in termination charges. This would have
had devastating impact on carriers (such as mobile and VoIP providers) who need
to terminate calls on Telstra's fixed line network, while giving Telstra
reseller partners a huge advantage.
The Local Carriage Service (LCS) is Telstra's wholesale
product which allows resellers to retail Telstra PSTN services. The company had
proposed significant reductions in the cost of providing this service in return
for doubling termination charges.
In a statement the ACCC said: "Telstra's proposed
undertaking prices would involve a substantial reduction in the headline LCS
prices and a substantial increase in the headline PSTN OTA prices.
"The ACCC is not satisfied that Telstra's proposed
prices, which have been presented to the ACCC as a package, are
reasonable", ACCC Chairman, Mr Graeme Samuel, said.
"Telstra's proposed pricing approach for the PSTN OTA
and the LCS would represent a fundamental rebalancing of the competitive
dynamics in the fixed line services markets, with a doubling of the headline
rate for PSTN services", he said.
"Telstra's proposed pricing would significantly
disadvantage facilities based access seekers, while providing an advantage to
resellers of Telstra's end-to-end local call services".
The ACCC also said that it believed the proposed charges are
based on reasonable estimates of efficient costs and that it will take
submissions on its draft rejection up until 29 September 2006.
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