Pricing Principles for the Local Carriage Service (LCS) Determination 2009 (Cth)

Pricing Principles for the Local Carriage Service (LCS) Determination 2009

Trade Practices Act 1974

The AUSTRALIAN COMPETITION AND CONSUMER COMMISSION makes this Determination under section 152AQA of the Trade Practices Act 1974.

Dated            3 December 2009

Graeme Samuel

Chairman

Australian Competition and Consumer Commission

1          Name of Determination

This Determination is the Pricing Principles for the Local Carriage Service (LCS) Determination 2009.

2          Commencement

This Determination commences on the day it is made.

Note: The Australian Competition and Consumer Commission must have regard to this Determination if it is required to arbitrate an access dispute under Division 8 of the Trade Practices Act 1974 in relation to the declared services covered by this Determination (see subsection 152AQA(6)). An arbitral determination may be backdated (see section 152DNA).

3          Pricing principles and indicative prices

The pricing principles specified in Schedules 1, 3 and 5 and the indicative prices specified in Schedules 2, 4 and 6 are to apply to the Local Carriage Service (LCS) declared by the Australian Competition and Consumer

Commission (Commission) under section 152AL of the Trade Practices Act 1974 (Act).

4          Repeal of earlier Pricing Principles Determinations for the LCS

This Determination repeals the following instruments:

·Pricing Principles for the Local Carriage Service, Wholesale Line Rental Service and Public Switched Telephone Originating and Termination Services dated 29 November 2006;

·Pricing Principles for the Local Carriage Service and the Wholesale Line Rental Service dated 30 July 2008; and

·any earlier Pricing Principles Determinations made for the LCS.

Schedule 1        Pricing principles for the LCS for the period to 31 December 2007

An interim retail-minus-retail-costs (RMRC) pricing principle should be adopted until the Commission has a robust cost model available. In implementing the interim RMRC pricing principle, the Commission will use:

Ÿ          avoidable retail costs for the LCS rather than avoided retail costs;

Ÿ          unbundled benchmark retail prices; and

Ÿ          separate pricing of the LCS.

The Commission will seek to implement a cost-based pricing approach once a robust cost model, capable of producing reliable estimates of costs in all geographic regions, is available.

Schedule 2        Indicative prices for the LCS for the period to 31 December 2007

The indicative prices for the LCS for the period to 31 December 2007 are:

Local Calls
Telstra Retail Prices	20c ex GST
Unit Avoidable Retail Costs	2.29c/call
GST Adjustment	0.21c
Indicative Price	17.92c

Schedule 3        Pricing principles for the LCS for the period 1 January 2008 to 31 July 2009

An RMRC pricing principle should be adopted until the Commission has a robust cost model available. In implementing the interim RMRC pricing principle, the Commission will use:

Ÿ          avoidable retail costs for the LCS rather than avoided retail costs;

Ÿ          unbundled benchmark retail prices; and

Ÿ          separate pricing of the LCS.

The Commission will seek to implement a cost-based pricing approach once a robust cost model, capable of producing reliable estimates of costs in all geographic regions, is available.

Schedule 4        Indicative prices for the LCS for the period 1 January 2008 to 31 July 2009

The indicative prices for the LCS for the period from 1 January 2008 to 31 July 2009 are:

Local Calls
Telstra Retail Prices	20c ex GST
Unit Avoidable Retail Costs	2.90c/call
GST Adjustment	0.26c
Indicative Price	17.36c

Schedule 5        Pricing principles for the LCS for the period 1 August 2009 to 31 December 2010

An RMRC pricing principle should be adopted until the Commission has a robust cost model available. In implementing the interim RMRC pricing principle, the Commission will use:

Ÿ          avoidable retail costs for the LCS rather than avoided retail costs;

Ÿ          unbundled benchmark retail prices; and

Ÿ          separate pricing of the LCS.

The Commission will seek to implement a cost-based pricing approach once a robust cost model, capable of producing reliable estimates of costs in all geographic regions, is available.

Schedule 6        Indicative prices for the LCS for the period 1 August 2009 to 31 December 2010

The indicative prices for the LCS for the period 1 August 2009 to 31 December 2010 are:

Local Calls
Telstra Retail Prices	20c ex GST
Unit Avoidable Retail Costs	2.90c/call
GST Adjustment	0.26c
Indicative Price	17.36c