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Telstra loses ACCC pricing battle in Federal Court

29 Mar 2017

The Federal Court of Australia has dismissed Telstra’s application for a judicial review of the ACCC’s fixed line services pricing determinations, which required a drop in access prices.

Rod Sims, Australian Competition and Consumer Commission chairman, says the ruling will help provide ‘some predictability and stability in access prices over the four-year period of the determination while the NBN rollout is completed.”

The ACCC’s 2015 final determination on fixed-line services pricing required a one-off uniform decrease of 9.4% in access prices for the seven declared fixed-line access services, with the pricing due to apply from November 01, 2015 to 30 June 2019.

“The ACCC considered that users of Telstra’s network should not pay the higher costs that result from fewer customers as NBN migration occurs,” the competition watchdog says.

“If there were no adjustment for these higher costs, the customers who have not yet been migrated to the NBN will ultimately pay significantly higher prices for copper based services.”

Telstra in turn, sought the review, claiming the pricing would lead to under-recovery of costs from supplying the services.

The Federal Court rejected all of Telstra’s grounds of review.

Sims says the ACCC understood Telstra had an opportunity to be compensated for costs of the shrinking copper network customer base under its migration arrangements with NBN Co and is receiving payments for customer disconnections.

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