Telstra’s application for judicial review of the Australian Competition and Consumer Commission’s fixed-line services final access determinations, made in October 2015, have been dismissed by the Federal Court of Australia.
The ACCC’s 2015 final access determinations required a one-off uniform decrease of 9.4 per cent in access prices from previous levels for the seven declared fixed-line access services. The prices were set to apply from 1 November 2015 until 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.
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.
The ACCC took that approach because it considered that users of the fixed line network have not caused the asset redundancy and under-utilisation caused by the NBN and will not be able to use those assets and capacity in the future.
The ACCC considered that it would not be in the long-term interests of end-users for these costs to be allocated to users of the network who do not cause them, given that Telstra had an opportunity to be compensated for these costs.
Telstra had sought review of the ACCC’s application of its pricing methodology in making its determination. Telstra claimed that the ACCC’s pricing decision would lead to under-recovery of costs from its supply of declared fixed-line services.
The Court rejected all of Telstra’s grounds of review.
“The ACCC’s determinations meant that the remaining users of Telstra’s network shouldn’t pay higher costs due to a shrinking customer base on the copper network as others migrate to the NBN,” ACCC Chairman Rod Sims said.
“The ACCC considered that Telstra had an opportunity to be compensated for such costs under its migration arrangements with NBN Co, and is receiving payments for customer disconnections.
“The Court has recognised that ACCC decisions involve evaluating a range of competing factors, and that our role as the regulator is to consider all relevant information to arrive at an outcome that will promote the long-term interests of end-users.
“Today’s decision will help provide some predictability and stability in access prices over the four-year period of the determination while the NBN rollout is completed.”
