Telstra Corporation Ltd v Australian Competition and Consumer Commission

[2009] FCA 757

FEDERAL COURT OF AUSTRALIA

Telstra Corporation Limited v Australian Competition and Consumer Commission [2009] FCA 757

ADMINISTRATIVE LAW – telecommunications industry – 14 arbitrations between Telstra Corporation Limited (Telstra) and access seekers over terms and conditions of access to declared services – Div 8 of Pt XIC of Trade Practices Act 1974 (Cth) (Act) – challenge by Telstra to the final determinations made by Australian Competition and Consumer Commission (ACCC) in the 14 arbitrations on judicial review grounds that were common to various combinations of the arbitrations –

(A) whether ACCC misconstrued s 152CR(1)(d) of Act by adopting pooling and allocation method in dealing with specific costs –

(B) whether ACCC’s failure to take into account model terms that it had determined under s 152AQB(2) of Act involved procedural ultra vires and failure to take into account a relevant consideration –

(C) whether it was beyond the power conferred on ACCC by s 152CP of Act to make a determination that included a charge for call diversion when call diversion was provided as part of a new connection – whether call diversion when provided in those circumstances was a matter “relating to” access to the declared service within s 152CP(2) of Act –

(D) whether ACCC erred in law by inconsistently using Capital Asset Pricing Model (CAPM) in order to estimate cost to Telstra of equity capital while rejecting Telstra’s contention that there should be an uplift in the element to be included for Weighted Average Cost of Capital (WACC) to allow for welfare asymmetry connected with overestimating or underestimating the WACC – whether use of CAPM involved acceptance of its underlying assumptions – whether inconsistency established – whether inconsistency in economic methodology an error of law –

(E) whether, by not including in the monthly charge to be paid by access seekers an element for line costs, ACCC erred in law and failed to observe s 152DB(1)(b) of Act – construction of s 152DB(1)(b) of Act –

(F) whether later pricing principles for declared service impliedly revoked earlier ones – whether ACCC erred by taking later ones into account – whether later ones invalid by reason of having been made when earlier ones still in force and not expressly revoked – whether later ones validly backdated into period when earlier ones had been on foot.

Trade Practices Act 1974 (Cth) ss 152AF, 152AQA, 152AQB, 152AR, A52CP, 152CR, 151DB, 152DN, 152DNA

Application by GasNet Australia (Operations) Pty Ltd [2004] ATPR 41-978; [2003] ACompT 6 cited

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 cited
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 cited
Australian Securities and Investments Commission v Narain (2008) 169 FCR 211 cited
Brisbane City Council v The Valuer-General for the State of Queensland (1978) 140 CLR 41 distinguished
Caloundra City Council v Netstar Pty Ltd [2008] 1 Qd R 258 cited
Esber v Commonwealth (1992) 174 CLR 430 cited
Goodwin v Phillips (1908) 7 CLR 1 cited
Hatfield v Health Insurance Commission (1987) 15 FCR 487 cited
HP Mercantile Pty Ltd v Commissioner of Taxation (2005) 143 FCR 553 cited
Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111 distinguished
Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426 distinguished

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 followed

Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 followed
Minister for Immigration and Citizenship v Le (2007) 164 FCR 151 cited
Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 207 ALR 12; [2004] HCA 32 cited
Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 cited
Mitchell v Scales (1907) 5 CLR 405 cited
New South Wales Coal Compensation Board v Nardell Colliery Pty Ltd [2004] NSWCA 35 distinguished
Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 cited
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cited

Re Eckersley and Minister for Capital Territory (1979) 2 ALD 303
Re Martin and Commonwealth of Australia (1983) 5 ALD 277

Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 (2003) 198 ALR 59; [2003] HCA 30 followed
Repatriation Commission v Harrison (1997) 78 FCR 442 distinguished
Telstra Corporation Ltd v Australian Competition and Consumer Commission (2008) 171 FCR 174 referred to

Telstra Corporation Ltd v Australian Competition and Consumer Commission (No 2) (2008) 251 ALR 372; [2008] FCA 1640 referred to

Telstra Corporation Ltd v Commonwealth (2008) 234 CLR 210 cited
Visa International v Reserve Bank of Australia (2003) 131 FCR 300 cited
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 242 ALR 383 cited
Ward v Repatriation Commission (1997) 46 ALD 454 followed

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and AGILE PTY LTD (ACN 080 855 321)
NSD 69/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and ADAM INTERNET PTY LIMITED (ACN 055 495 853)
NSD 70/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and PRIMUS TELECOMMUNICATIONS PTY LIMITED (ACN 071 191 396)
NSD 72/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and AMCOM PTY LTD (ACN 009 336 341)
NSD 73/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and NETWORK TECHNOLOGY (AUST) PTY LTD (ACN 096 864 836)
NSD 75/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and TPG INTERNET PTY LTD (ACN 068 383 737)

NSD 77/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and PRIMUS TELECOMMUNICATIONS PTY LIMITED (ACN 071 191 396)
NSD 78/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and MACQUARIE TELECOM PTY LIMITED (ACN 082 930 916)
NSD 105/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and XYZED PTY LIMITED (ACN 092 450 783)
NSD 529/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and POWERTEL LIMITED (ACN 001 760 103)
NSD 531/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and REQUEST BROADBAND PTY LTD (ACN 091 530 586)
NSD 533/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and OPTUS NETWORKS PTY LIMITED (ACN 008 570 330)
NSD 717/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and CHIME COMMUNICATIONS PTY LTD (ACN 073 119 285)
NSD 718/2008

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and PRIMUS TELECOMMUNICATIONS PTY LIMITED (ACN 071 191 396)
NSD 719/2008

LINDGREN J
17 JULY 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
general division	NSD 69 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

AGILE PTY LTD
(ACN 080 855 321)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
gENERAL dIVISION	NSD 70 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

ADAM INTERNET PTY LIMITED
(ACN 055 495 853)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 JULY 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
gENERAL dIVISION	NSD 72 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

PRIMUS TELECOMMUNICATIONS PTY LIMITED
(ACN 071 191 396)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 JULY 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 73 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

AMCOM  PTY LTD
(ACN 009 336 341)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 75 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

NETWORK TECHNOLOGY (AUST) PTY LTD
(ACN 096 864 836)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 77 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

TPG INTERNET PTY LTD
(ACN 068 383 737)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 78 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

PRIMUS TELECOMMUNICATIONS PTY LIMITED
(ACN 071 191 396)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 105 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

MACQUARIE TELECOM PTY LIMITED
(ACN 082 930 916)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 529 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

XYZED PTY LIMITED
(ACN 092 450 783)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 JULY 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 531 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

POWERTEL LIMITED
(ACN 001 760 103)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 JULY 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 533 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

REQUEST BROADBAND PTY LTD
(ACN 091 530 586)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 JULY 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 717 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

OPTUS NETWORKS PTY LIMITED
(ACN 008 570 330)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 718 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

CHIME COMMUNICATIONS PTY LTD
(ACN 073 119 285)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
General Division	NSD 719 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

PRIMUS TELECOMMUNICATIONS PTY LIMITED
(ACN 071 191 396)
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	17 july 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The applicant pay the respondents’ costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
General Division NSD 69 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

AGILE PTY LTD
(ACN 080 855 321)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 70 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

ADAM INTERNET PTY LIMITED
ACN (055 495 853)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 72 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

PRIMUS TELECOMMUNICATIONS PTY LIMITED
(ACN 071 191 396)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
gENERAL dIVISION NSD 73 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

AMCOM PTY LTD
(ACN 009 336 341)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 75 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

NETWORK TECHNOLOGY (AUST) PTY LTD
(ACN 096 864 836)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 77 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

TPG INTERNET PTY LTD
(ACN 068 383 737)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 78 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

PRIMUS TELECOMMUNICATIONS PTY LIMITED
(ACN 071 191 396)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division

NSD 105 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

MACQUARIE TELECOM PTY LIMITED
(ACN 082 930 916)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 529 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

XYZED PTY LIMITED
(ACN 092 450 783)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 531 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

POWERTEL LIMITED
(ACN 001 760 103)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 533 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

REQUEST BROADBAND PTY LTD
(ACN 091 530 586)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 717 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

OPTUS NETWORKS PTY LIMITED
(ACN 008 570 330)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
general division NSD 718 of 2008

BETWEEN: TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

CHIME COMMUNICATIONS PTY LTD
(ACN 073 119 285)
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY NSD 719 of 2008

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

PRIMUS TELECOMMUNICATIONS PTY LIMITED
(ACN 071 191 396)
Second Respondent

JUDGE:

LINDGREN J

DATE:

17 JULY 2009

PLACE:

SYDNEY

TABLE OF CONTENTS

Section	Para
Introduction	[1]
A	Pooling and Allocation Method	[24]
B	ULLS Model Terms	[64]
C	Call Diversion	[124]
D	Weighted Average Cost of Capital (WACC)	[190]
E	Line Costs	[285]
F	2007 LSS Pricing Principles	[400]
Annexure – Acronyms and Terms

REASONS FOR JUDGMENT

INTRODUCTION

1. These reasons for judgment relate to 14 proceedings that were heard together.  The evidence in each was evidence in the others, subject to all just exceptions on grounds of relevance.

2. The fourteen proceedings concern Part XIC (ss 152AA-152EQ) of the Trade Practices Act 1974 (Cth) (the Act) headed “Telecommunications access regime”. That Part provides for a regulated access régime specific to telecommunications services.

3. The proceedings relate to access to two services that are “declared services” under s 152AL of the Act:  the Line Sharing Service (also known as the High Frequency Unconditioned Local Loop Service) (LSS) and the Unconditioned Local Loop Service (ULLS).  The applicant in each proceeding (Telstra) owns the lines over which the LSS and the ULLS are provided.

4. There was an access dispute between Telstra and the second respondent in each proceeding.  The first respondent in each proceeding, the Australian Competition and Consumer Commission (ACCC), was the arbitrator.  Some access disputes related to the LSS and the others to the ULLS.  The following table identifies the LSS and the ULLS proceedings, the names of the respective second respondents, and the abbreviations by which I will refer to them:

Second Respondent	Abbreviation	Proceeding NSD No
LSS
Agile Pty Ltd	Agile	69/2008
Adam Internet Pty Limited	Adam	70/2008
Primus Telecommunications Pty Limited	Primus	72/2008
Amcom Pty Ltd	Amcom	73/2008
Network Technology (Aust) Pty Ltd	Network	75/2008
TPG Internet Pty Ltd	TPG	77/2008
ULLS
Primus Telecommunications Pty Limited	Primus	78/2008
Macquarie Telecom Pty Limited	Macquarie	105/2008
XYZed Pty Limited	XYZed	529/2008
PowerTel Limited	PowerTel	531/2008
Request Broadband Pty Ltd	Request	533/2008
Optus Networks Pty Limited	Optus	717/2008
Chime Communications Pty Ltd	Chime	718/2008
Primus Telecommunications Pty Limited	Primus	719/2008

In referring to the respective proceedings I will incorporate a reference to the LSS or ULLS, as the case may be; for example, “the Agile LSS proceeding”, “the PowerTel ULLS proceeding”.  It will be noted that there are three proceedings, NSD 72/2008, NSD 78/2008 and NSD 719/2008, in which Primus is the second respondent.  I will call the first “the Primus LSS proceeding” and the second “the Primus ULLS proceeding” in accordance with the convention just mentioned.  I will call the third “the Primus ULLS (Connections) proceeding”.

1. In certain circumstances Part XIC of the Act permits an access dispute to be arbitrated by ACCC (referred to as “the Commission” in the Act and in various parts of the evidence and in the parties’ submissions). Arbitration takes place under Div 8 of Pt XIC.

2. In these fourteen proceedings Telstra challenges final determinations (FDs) made by ACCC in its arbitrations under Div 8 of the access disputes between Telstra and the 14 second respondents.

3. I have previously heard and determined three proceedings in which Telstra challenged FDs made by ACCC in relation to access disputes under Div 8: see Telstra Corporation Ltd v Australian Competition and Consumer Commission (2008) 171 FCR 174 (Earlier Reasons) and Telstra Corporation Ltd v Australian Competition and Consumer Commission and Others (No 2) (2008) 251 ALR 372; [2008] FCA 1640.

4. In those proceedings, Telstra sought review of FDs made by ACCC in respect of LSS access disputes between Telstra of the one part and Request, Chime and Primus respectively of the other part. 

5. The grounds on which Telstra relies in these proceedings are set out in the following table (Table), the numerals being the number of the ground in the relevant current form of the application for an order of review:

   
   

TELSTRA’S GROUNDS		PROCEEDINGS
		Agile LSS 69/2008	Adam LSS 70/2008	Primus LSS 72/2008	Amcom LSS 73/2008	Network Tech LSS 75/2008	TPG LSS 77/2008	Primus ULLS 78/2008	Macquarie ULLS 105/2008	XYZed ULLS 529/2008	PowerTel ULLS 531/2008	Request ULLS 533/2008	Optus ULLS 717/2008	Chime ULLS 718/2008	Primus ULLS (Connections) 719/2008
A	Pooling and Allocation Method – s 152CR(1)(d) - error of law	5	5	5	5	5	5	2	2	1	1	1	1	1
B	ULLS Model Terms – s 152AQB(9) –procedural ultra vires and failure to take into account relevant consideration	4	4	3	3	3	3
C	Call Diversion – FD not authorised by Act and made in excess of jurisdiction	4	4	1
D	WACC (Weighted Average Cost of Capital) – error of law and Wednesbury unreasonableness	6	6	6	6	6	6	3	3	2	2	2	2	2
E	Line costs – error of law, no evidence and statutory procedural ultra vires	3, 4	3, 4	3, 4	3, 4	3, 4	3, 4
F	2007 LSS Pricing Principles – s 152AQA(6) – Errors of law and taking into account irrelevant consideration	2	2	2	2	2	2

1. The second respondents can be conceived of as falling into groups according to their legal representation.  Mr A Robertson SC with Mr S J Free of counsel appeared for Optus and XYZed.  I was told that those companies form part of the Singtel Optus group.Ms M Sloss SC with Mr M J Hoyne of counsel appeared for Agile, Adam, Amcom, Network, Macquarie, PowerTel, Request, Chime and Primus.  Mr M J Hoyne of counsel appeared for TPG.

2. In all proceedings Dr J E Griffiths SC and Ms M N Allars appeared for Telstra.  Mr J S Hilton SC and Mr M H O’Bryan appeared for ACCC.

3. Although any particular ground referred to in the Table may have borne different numbers in the respective applications for an order of review, the ground was mutatis mutandis the same as between the various proceedings in which reliance was placed upon it.  The parties agreed that:

   ·the Adam LSS proceeding (NSD 70/2008) was representative of the LSS proceedings;

   ·the Chime ULLS proceeding (NSD 718/2008) was representative of the ULLS proceedings, except in respect of the ULLS Model Terms ground;

   ·in respect of the ULLS Model Terms ground, the Optus ULLS proceeding (NSD 717/2008) was the representative proceeding.

4. Accordingly, submissions were made by reference to the representative proceedings on the basis that a decision on the issues in them would also resolve the same issues in all of the proceedings of which they were representative.

5. The hearing took place in two tranches.  The first tranche related to the Pooling and Allocation Method and the ULLS Model Terms grounds (A and B in the Table).  The second tranche related to the Call Diversion, WACC, Line Costs, and 2007 LSS Pricing Principles grounds (C, D, E and F in the Table).

6. As can be seen from the Table:

   ·the Pooling and Allocation Method ground (A in the Table) is Ground No 5 in the Adam LSS proceeding and Ground No 1 in the Chime ULLS proceeding. It features in all proceedings except the Primus ULLS (Connections) proceeding;

   ·the ULLS Model Terms ground (B in the Table) is Ground No 3 in the Optus ULLS proceeding and does not form part of any of the LSS proceedings;

   ·the Call Diversion ground (C in the Table) is Ground No 4 in the Chime ULLS proceeding and does not form part of any of the LSS proceedings (it occurs only in the Optus ULLS proceeding, the Chime ULLS proceeding, and the Primus ULLS (Connections) proceeding);

   ·the WACC ground (D in the Table) is Ground No 6 in the Adam LSS proceeding and Ground No 2 in the Chime ULLS proceeding and occurs in all proceedings except for the Primus ULLS (Connections) proceeding;

   ·the Line Costs ground (E in the Table) is Grounds Nos 3 and 4 in the Adam LSS proceeding.  It occurs in all of the LSS proceedings but does not form part of any of the ULLS proceedings; and

   ·the LSS Pricing Principles ground (F in the Table) is Ground No 2 in the Adam LSS proceeding, and occurs in all of the LSS proceedings but in none of the ULLS proceedings.

7. In the Earlier Reasons at [11]-[14] I referred to some technical matters and gave a summary at [15]-[46] of the provisions of Pt XIC that were relevant to the three proceedings the subject of the Earlier Reasons (the Earlier Proceedings).  I will take those paragraphs as read, rather than encumbering these reasons with them.

8. Annexure A to these reasons is a list of acronyms and terms of present relevance.

9. One technical matter to which it is useful to refer at this stage is the nature of the LSS and the ULLS.  First, I quote [12] and [13] from the Earlier Reasons:

   12.Telstra owns a variety of networks which it uses to provide telecommunication services.  One such network is the Public Switched Telephone Network (PSTN).  Through the PSTN, Telstra provides to end-users various telephony and data services such as local, long distance, national and international calls and dial-up internet connections.  Another Telstra  network is its “Broadband” network.  The PSTN and the Broadband network use what is called the Customer Access Network (CAN).  Generally speaking, the CAN can be understood to be the network of connections between end-users, whether business or private, and some aggregation point within the network, which is usually a local exchange building.

   13.Connection between the end-user and that point within the network is normally achieved by way of “line” (or “metallic pair” or “twisted pair”) of copper or aluminium wire, or where there is no fixed line, by radio.  The copper or aluminium wire is often referred to as “unconditioned communications wire”.  It forms a continuous copper or aluminium path between the premises of end-users and exchanges and is commonly referred to as the Unconditioned Local Loop (ULL), “local loop” or, simply, “line”.  The word “unconditioned” signifies that the wire is bare or unqualified, that is, the equipment required to make it serviceable is not yet attached to it.

10. Both the LSS and the ULLS are provided over Telstra’s Customer Access Network (CAN).  They are provided to an access seeker such as any of the second respondents (access seekers) which provides them to a retail customer (end-user) over an Unconditioned Local Loop (ULL).  The CAN is the generic expression that applies to all of the ULLs; the ULLs, taken together, constitute the CAN.  The LSS and ULLS are provided by Telstra to the access seeker, not to the end-user.  However, once the access seeker has access to the LSS or the ULLS, it becomes a “service provider” vis-à-vis the end-user, that is to say, it provides to the end-user the service that the LSS or the ULLS, as the case may be, permits it to provide.

11. In its declaration of the LSS as a declared service, ACCC also identified the LSS as the “High Frequency Unconditioned Local Loop Service”.  The formal definition of the LSS is as follows:

    The High Frequency Unconditioned Local Loop Service is the use of the non-voiceband frequency spectrum of unconditioned communications wire (over which wire an underlying voiceband PSTN service is operating) between the boundary of a telecommunications network at an end-user’s premises and a point on a telecommunications network that is a potential point of interconnection located at, or associated with, a customer access module and located on the end-user side of the customer access module.

12. The other declared service of present concern, the ULLS, gives the access seeker the use of the entirety of a ULL.  In substance, it enables an access seeker to supply both voice (telephony) and broadband services to end-users.  The formal definition of the ULLS is as follows:

    The unconditioned local loop service is the use of unconditioned communications wire between the boundary of a telecommunications network at an end-user’s premises and a point on a telecommunications network that is a potential point of interconnection located at or associated with a customer access module and located on the end-user side of the customer access module.

13. In the case of both the LSS and the ULLS, the access seeker’s own equipment must be connected to the line in order for access by it to be realised.

    A chronology of important events:

14. The following events have assumed importance in the proceedings:

    1.On 4 August 1999 ACCC declared the ULLS as a declared service under s 152AL(3) with effect on the date of gazettal, 11 August 1999 (ULLS Declaration).

    2.On 18 May 2000, pursuant to ss 152AL(3) and 152AO, ACCC varied the description of the ULLS with effect on the date of gazettal, 24 May 2000.

    3.In March 2002 ACCC published its final report on pricing methodology for the ULLS, determining pricing principles for the ULLS in Chapter 4 (2002 ULLS Pricing Principles), and concluding that they should be based on total service long-run incremental cost (TSLRIC) principles.

    4.In August 2002 ACCC published its final report on whether the LSS should be a declared service under Part XIC (LSS Declaration Final Report), chapter 7 of which set out pricing principles for a declared LSS (2002 LSS Pricing Principles).

    5.On 7 October 2002, pursuant to s 152AL(3), ACCC declared the LSS a declared service with effect on the date of gazettal, 16 October 2002 (LSS Declaration).

    6.In October 2003, pursuant to s 152AQB(2), ACCC determined model terms and conditions relating to access to the ULLS in Ch 14 of Final Determination for model price terms and conditions of the PSTN, ULLS and LCS services (ULLS Model Terms or 2003 ULLS Model Terms).

    7.In the light of the new s 152ALA which came into force in December 2002, on 19 November 2003 ACCC specified an expiry date of 31 July 2006 for the ULLS and 31 October 2007 for the LSS, with effect on the date of gazettal, 3 December 2003

    8.In March 2004 ACCC published a (revised) guide to the resolution of telecommunications access disputes (Access Dispute Resolution Guidelines), which included in section 7.4 guidelines under s 152DNA(8) relating to backdating of the date that the provisions of a final determination take effect.

    9.In August 2004 ACCC published its final report on the assessment of Telstra’s proffered undertaking for the LSS.

    10.In December 2005 ACCC published its final report on the assessment of Telstra’s proffered ULLS and LSS monthly charge undertakings (ULLS and LSS Monthly Charge Undertaking Assessment).

    11.In July 2006 ACCC published its final determination resulting from its inquiry into, relevantly, the ULLS Declaration.

    12.On 28 July 2006, pursuant to s 152AL(3), ACCC re-declared the ULLS a declared service with effect on 1 August 2006 and expiring on 31 July 2009 (ULLS Re-Declaration).  This is the declaration of the ULLS that was in force at times relevant to the present proceedings.

    13.In August 2006 ACCC published its final report on the assessment of Telstra’s proffered ULLS monthly charge undertaking (ULLS Monthly Charge Undertaking Assessment).

    14.In October 2007 ACCC published its Review of the Line Sharing Service Declaration: Final Decision (LSS Declaration Review), Chapter 3 of which discussed LSS Pricing Principles.

    15.On 24 October 2007, pursuant to s 152AQA, ACCC determined pricing principles to apply to the LSS (2007 LSS Pricing Principles). They contained price related terms and conditions that consisted of indicative prices for the LSS applicable between 1 January 2008 and 31 July 2009.

    16.On 26 October 2007, pursuant to s 152ALA, ACCC extended the expiry date of the LSS Declaration to 31 July 2009 with effect on the date of gazettal, 29 October 2007 (LSS Extension Declaration).

    17.In November 2007 ACCC published its report as to the final pricing principles applicable to the ULLS (Unconditioned Local Loop Service (ULLS) – Final pricing principles (2007 ULLS Pricing Principles Report) ).

    18.On 21 November 2007, pursuant to s 152AQA, ACCC determined pricing principles specified in Schedule 1 to apply to the ULLS (Pricing Principles for the Unconditioned Local Loop Service) (ULLS Pricing Principles or 2007 ULLS Pricing Principles).

    A – POOLING AND ALLOCATION METHOD

    General

15. In the amended application for an order of review filed in the Adam LSS proceeding, this ground is ground No 5 which is as follows:

    5.In making the Decision, the First Respondent made an error of law by misconstruing s 152CR(1)(d) of the TPA [Trade Practices Act 1974 (Cth)] in reaching the conclusion that the pooling method and the allocation method (as defined in the particulars below) allowed the Applicant to recover its costs, including the direct costs, associated with the LSS, within ss 5(1)(f) and/or 5(1)(j) of the ADJR Act [Administrative Decisions (Judicial Review) Act 1977 (Cth)].

    Particulars

    (i)In making the Decision the First Respondent arrived at its calculation of the LSS annual costs by:

    (A)pooling costs of the LSS with costs of the unconditioned local loop service (“ULLS”) and Telstra’s own internal costs of a nature equivalent to the specific costs of the LSS and ULLS (“pooling method”); and

    (B)allocating this costs pool across the various lines over which those services are provided (“allocation method”).

    (ii)The pooling method and the allocation method are methods which aggregate the costs of a number of services and average those costs across the lines over which those services are provided, rather than providing a method for identifying the direct costs of the relevant declared service (that is, the LSS).

    (iii)The First Respondent found that allowing the recovery of LSS specific costs over LSS lines would result in a higher access price than the pooling method and the allocation method on which the LSS annual charge was based.

    (iv)As a result, the pooling method and the allocation method do not allow the Applicant to recover LSS specific costs in the LSS annual charge, which is inconsistent with the matter referred to in s 152CR(1)(d) of the TPA.

    (v)In concluding that the pooling method and the allocation method allowed the Applicant to recover its costs, including the direct costs, associated with the LSS, the First Respondent misconstrued s 152CR(1)(d) of the TPA.

    (vi)In the result the Decision is invalid (or liable to be set aside) as infected by jurisdictional error and on the grounds stated in s 5(1)(f) and/or (j) of the ADJR Act.

    [Original emphasis]

    Notwithstanding the discrete references to “pooling method” and “allocation method”, I will use the composite expression “Pooling and Allocation Method”.

1. The Pooling and Allocation Method ground is raised in thirteen of the fourteen proceedings, the exception being the Primus ULLS (Connections) proceeding.

2. In the application for an order of review filed in the Chime ULLS proceeding, the Pooling and Allocation Method ground was Ground No 1, which was, mutatis mutandis, the same as Ground No 5 in the Adam LSS proceeding set out above. 

3. A Pooling and Allocation Method ground was raised by Telstra in the Earlier Proceedings. I dealt with it at [268]–[345] of the Earlier Reasons. In the Earlier Proceedings the Pooling and Allocation Method was raised by Telstra’s Grounds 5(a), 5(b), 5(c) and 6. Of these, Grounds 5(a), 5(b) and 5(c) were forms of procedural ultra vires and failure to take into account a relevant consideration – grounds that are not repeated in the present proceedings. However, Telstra’s Ground 6 in the Earlier Proceedings was error of law in the form of a misconstruction of s 152CR(1)(d) of the Act to permit a conclusion that the Pooling and Allocation Method allowed Telstra to recover its costs, including its direct costs.

4. In respect of its present Pooling and Allocation Method ground, Telstra relies only on error of law in the form of a misconstruction of s 152CR(1)(d).

5. Virtually the entire argument took place by reference to the Adam LSS proceeding ACCC’s Statement of Reasons accompanying its FD in relation to the Adam LSS arbitration (Adam LSS FD Statement of Reasons) was, relevantly, mutatis mutandis, identical to the Chime ULLS FD Statement of Reasons.   As noted in Telstra’s submissions (para 3.42):

   The factual background and legal issues in the relevant proceedings concerning the ULLS are in all relevant respects the same as … in the proceedings concerning the LSS.

   Telstra therefore relied on the same argument in relation to both the LSS and ULLS proceedings.  Accordingly, I will refer to the Adam LSS proceeding as representative of all 13 proceedings in which an access seeker relies upon the present ground.

   Prior considerations of a pooling and allocation approach by ACCC and the Tribunal

6. ACCC’s DFD Consultation Papers had proposed the Pooling and Allocation Method; see the Adam LSS DFD Consultation Paper, section 4.1.8 on “Specific costs” and the Chime ULLS DFD Consultation Paper, section 4.1.6 on “Specific costs”.  Both DFD Consultation Papers referred to previous considerations of this issue.

7. Until 2005, ACCC dealt with specific costs by using the cost allocation method for which Telstra contends.  Indeed, at [80] of the Adam LSS FD Statement of Reasons ACCC acknowledged that it could be argued that ACCC’s 2002 LSS Pricing Principles were inconsistent with the pooling methodology.  However, in its Telstra’s Undertakings for the Unconditioned Local Loop Service – Discussion Paper of March 2005 (ULLS Undertakings Discussion Paper), ACCC noted that the approach that it had been following had been called into question.  Over a period from October 2004 to March 2007 ACCC embraced the Pooling and Allocation Method.  I outlined the history in the Earlier Reasons at [292] ff.

8. Adam (and Chime) submitted to ACCC that it should adhere to the Pooling and Allocation Method as proposed in section 4.1.6 of the Adam LSS DFD Consultation Paper (section 4.1.8 of the Chime ULLS DFD Consultation Paper).

9. In its present submissions (to the Court) Chime also refers to the Request LSS FD Statement of Reasons dated 1 August 2007 (the subject of consideration in the Earlier Reasons), and the more recent Tribunal decision in relation to ULLS annual charges, Re Telstra Corporation Ltd (No 3) [2007] ACompT 3 at [387]-[413].

10. The 2007 LSS Pricing Principles, determined by ACCC on 24 October 2007, were as follows:

    ·    … TSLRIC + pricing principles should be applied to the LSS

    ·    a specific cost component should be included in the LSS monthly price, calculated by combining ‘LSS specific costs’ with ‘ULLS specific costs” and Telstra’s internal equivalent costs for ADSL, and allocating those costs across the number of active ULLS, LSS and ADSL lines

    ·    a contribution for line costs will not be recovered in the LSS monthly price

    ·    connection and disconnection charges should be set with reference to the amounts charged by third party contractors to Telstra for jumpering work in exchanges, indirect costs and back-of-house costs.

    [My emphasis]

11. The second of the 2007 LSS Pricing Principles set out above expresses the Pooling and Allocation Method.  The 2007 ULLS Pricing Principles of 21 November 2007 also contained, mutatis mutandis, that principle.

12. I do not think it necessary to elaborate on the various prior considerations of the present issue save to note that since December 2005 ACCC and the Tribunal have consistently determined that the statutory criteria in Part XIC of the Act were better served by a pooling and allocation approach than by the method for which Telstra contends.

13. Submissions were also made by Optus and XYZed, and by TPG and Macquarie, but they did not refer to any additional instances of prior consideration of the present issue by ACCC or the Tribunal.

    The Adam LSS FD Statement of Reasons

14. In section 4.1.8 of the Adam LSS FD Statement of Reasons, headed “Specific Costs”, ACCC addressed the parties’ submissions and expressed its conclusions on the present issue.

15. Earlier in the Statement of Reasons ACCC had noted (at [80]) that the 2007 LSS Pricing Principles expressly required the use of the “pooling approach”.

16. In section 3.3.4 headed “Section 152CR(1)(d) The direct cost of providing access to the declared service”, ACCC stated (at [129]) that it considered that the direct costs of providing access to a declared service were those incurred (or caused) by the provision of access, and included the incremental costs of providing access. ACCC also noted (at [132] and [133]) that more recently the Tribunal had considered that the direct costs criterion in s 152CR(1)(d) was concerned with ensuring that the costs of providing the service were recovered, and that the Tribunal had noted that direct costs could conceivably be allocated (and still recovered) in a number of ways, any of which would be consistent with s 152CR(1)(d): citing Re Telstra Corporation Limited [2006] ACompT 4 at ([139]).

17. In section 4.1.8 (at [392] ff) ACCC noted  that the term “Specific Costs”, when used in respect of the LSS, referred to the incremental cost of providing the LSS, and included the costs associated with ordering, provisioning and qualifying the LSS.  ACCC referred to IT system development and operational costs, connection costs, wholesale management costs and indirect costs as categories of LSS-specific costs.  ACCC accepted (at [393]) that some of those categories of costs were recovered through LSS connection charges or other charges that Telstra imposed, and so were not relevant to the calculation of LSS annual charges.

18. Under the heading “Cost allocation” within section 4.1.8, ACCC explained (at [396]) that, consistently with the Tribunal’s views, it proposed an approach to cost allocation that, first, pooled the specific costs associated with (i) the LSS and (ii) the ULLS and (iii) Telstra’s own internal costs of a nature equivalent to the specific costs of the LSS and ULLS; and, second, allocated this pool to a demand base that included all downstream ADSL services, including the LSS. ACCC noted that Telstra opposed this approach ([399] ff), while Adam supported it ([406] ff). Telstra submitted (as noted by ACCC at [400]) that pooling was inconsistent with the direct cost criterion found in s 152CR(1)(d), which required, according to Telstra’s submission, that the specific costs of the LSS be recovered in the LSS access charges alone.

19. In the Earlier Reasons at [273]–[280], I gave a more detailed description of the nature of the Pooling and Allocation Method.

20. ACCC noted (at [411]ff  of the Statement of Reasons)  that it had previously adopted the “pooling approach”, which was also consistent with the reasons of the Tribunal, in relation to both LSS and ULLS annual charges (ACCC referred to Re Telstra Corporation Ltd [2006] ACompT 4 at [150] and ReTelstra Corporation Limited (No 3) [2007] ACompT 3 [at 396]-[413]). ACCC stated (at [415]) that it concurred with the Tribunal’s reasoning on the issue of cost allocation.

21. ACCC went on to note ([at 416]) that adopting the method proposed by Telstra would lead to a higher access charge than the Pooling and Allocation Method would do.  ACCC explained, however, that contrary to Telstra’s submission, this was not its motive for adopting the Pooling and Allocation Method; rather, its preference resulted from “its detailed consideration of the alternative approaches assessed against the subsection 152CR(1) criteria and the LSS pricing principles”.  ACCC concluded that the higher charges that result from Telstra’s proposed method could not be supported by those criteria and the 2007 LSS Pricing Principles, and that having regard to them the Pooling and Allocation Method was to be preferred (at [417]).

22. At [418]-[450] of the Adam LSS FD Statement of Reasons, ACCC gave a detailed assessment of the Pooling and Allocation Method against all of the s 152CR(1) criteria. In relation to s 152CR(1)(d) ([438]-[441]), ACCC stated (at [438], which is mirrored in [612] of the Chime ULLS FD Statement of Reasons), that that criterion:

    …is concerned with ensuring that Telstra will be able to recover its costs in providing access, either to itself or to LSS access seekers.  In this context, the criterion involves consideration of whether Telstra will be able to recover its ‘LSS specific costs’ inclusive of a normal risk-adjusted return on its capital employed.

23. ACCC explained that the Pooling and Allocation Method could not compromise Telstra’s ability to recover its direct costs of providing access to the LSS (at [440]).

    Consideration

24. Telstra submits that error of law is found in the passage set out above, because s 152CR(1)(d) speaks only of the direct costs of providing access to the declared service, in the present cases the LSS and the ULLS.

25. Telstra’s argument is framed in a similar way to the way in which it was framed in the Earlier Proceedings (see the Earlier Reasons at [283]-[284]). I dealt with that argument in the Earlier Reasons at [300]-[314] and concluded that ACCC did not misconstrue s 152CR(1)(d), which, properly construed, was not inconsistent with ACCC’s adoption of the Pooling and Allocation Method. In the result, Telstra’s error of law ground of review was not made out.

26. I am aware that it is necessary to maintain a distinction between the Earlier Proceedings and the present proceedings.  They relate to different arbitrations, different FDs, and different FD Statements of Reasons.  However, in oral submissions, senior counsel for Telstra conceded, as he was bound to do, that there was some overlap between the argument advanced in the Earlier Proceedings and that which he now advanced and which he described as “more refined”.

27. With respect, I have had some difficulty in identifying distinguishing refinements in Telstra’s present argument, notwithstanding the customary skill of senior counsel for Telstra. He has argued that according to the proper construction of s 152CR(1)(d):

    ·ACCC was bound in the Adam LSS arbitration to identify and take into account the direct costs of providing Adam with access to the LSS with a view to Telstra’s recovering those costs from Adam;

    ·ACCC was not at liberty to take those direct costs into account only as part of a pool that also included specific costs associated with providing access to the ULLS, and Telstra’s own internal costs of providing downstream ADSL services of a nature equivalent to those specific costs associated with the LLS and the ULLS;

    ·ACCC was not at liberty to introduce cross subsidisation by Telstra’s retail customers (end-users) in respect of ADSL services, of LSS (or ULLS) access seekers and their retail customers (end-users).

28. Telstra seems to disavow, however, any suggestion that s 152CR(1)(d) is to be construed as requiring that an FD have the effect that the direct costs of providing access to the declared service be in fact recoverable through the access charge for that service. Telstra accepts that ACCC is at liberty to place what weight it thinks appropriate on different aspects of the evidence, and, it must follow, on the evidentiary support for the different criteria in s 152CR(1). Telstra insists, however, that ACCC must take into account the direct costs as being recoverable through the access charge to be made for the particular declared service.

29. I have difficulty with Telstra’s argument.  If the argument is that ACCC must take into account as one possibility, making direct costs recoverable through the access charge alone, the fact is that ACCC did take that possibility into account.  It could hardly avoid doing so because that possibility was urged on it by Telstra.  However, ACCC rejected it.

30. Forming attachments to the Adam LSS FD Statement of Reasons were certain cost models.  These contained figures for various categories of costs and were the subject of confidentiality orders.  Telstra does not dispute that they included the direct costs of providing access to the LSS.  A similar observation applies to cost models that were attached to the Chime ULLS FD Statement of Reasons.

31. If Telstra’s contention is that ACCC did not pause to note what the direct costs were before applying the pooling and allocation methodology, the cost models to which I have referred show that it did.

32. There are several answers to Telstra’s submission.

33. First, as noted above, ACCC did take into account the direct costs of providing access to the LSS, by taking into account the direct costs particularised in the annexures to the Adam LSS FD Statement of Reasons (and to the Chime ULLS FD Statement of Reasons).

34. Second, if, as Telstra submits, ACCC is required to take into account the direct costs with a view to their being recovered out of the LSS access charge, then since the fixing of the amount of that access charge is itself a matter for ACCC, Telstra’s submission seems to become, upon analysis, a submission that ACCC was required to fix the access charge at a level that would allow for full recovery out of the LSS access charge.  Yet this is a submission that Telstra seems to disavow.  In any event, I would reject it.  Allowing for full recovery with the access charge is not the only way in which ACCC was able to take the direct costs into account.

35. Third, Telstra’s complaint is in reality a complaint that ACCC did not take into account the direct costs to Telstra of providing access to the LSS, in the manner, to the extent, with the weight, and with the result, that Telstra would have preferred. ACCC took into account the s 152CR(1)(d) criterion but also other criteria, in particular, the promotion of the LTIE (para (a) of s 152CR(1)), and came up with the result that allowed for Telstra’s recovering its direct costs of providing access to the LSS only as part of a pool of costs. The duty imposed on ACCC by s 152CR(1) to take into account, inter alia, the direct costs of providing access to the declared service was not inconsistent with ACCC’s following that course and arriving at that conclusion.

36. Fourth, some of the criteria in s 152CR(1) pull in different directions, and it was a matter for ACCC, provided it genuinely took them all into account, to allocate influence and weight as between them.  It was not required to allow the para (d) criterion full rein, unmitigated by the other s 152CR(1) criteria.

37. With respect, I see no relevant difference between the issues and submissions on the Pooling and Allocation Method ground in the Earlier Proceedings and in these proceedings, and I see no reason to depart from my reasons and conclusion in relation to that ground in the Earlier Reasons.

38. In addition to what I have said above, I adopt, mutatis mutandis, the Earlier Reasons at [300]-[314].

    Conclusion

39. For the above reasons and for those which I gave at [300]-[314] of the Earlier Reasons, the Pooling and Allocation Method ground is not established.

    B – ULLS MODEL TERMS

    General

40. In October 2003 ACCC published the ULLS Model Terms. As can be seen from its title, this determination is relevant to the ULLS but not to the LSS. The ULLS Model Terms were determined under s 152AQB(2) of the Act which requires ACCC to make a written determination setting out model terms and conditions relating to access to each “core service”. The ULLS is a core services but the LSS is not: see s 152AQB(1).

41. Section 152AQB(9) provides that ACCC must have regard to a determination under s 152AQB if it is required to arbitrate an access dispute under Div 8 in relation to a core service covered by the determination. Telstra relies on this provision.

42. Section 152AQB(10), however, provides that a determination made under s 152AQB has no effect to the extent that it is inconsistent with, relevantly, any determination by ACCC under s 152AQA of principles relating to the price of access to a declared service.

43. The ULLS access seekers contend that the ULLS Model Terms are inconsistent with the 2007 ULLS Pricing Principles) determined by ACCC under s 152AQA in November 2007, with the result that s 152AQB(10) causes the latter to prevail to the extent of the inconsistency.

44. Telstra, on the other hand, submits that in making the relevant ULLS FDs, ACCC:

    (a)failed to observe procedures which were required by law to be observed in connection with the making of the final determinations in respect of the ULLS, in that it failed to have regard to the ULLS Model Terms…; and

    (b)failed to take into account a relevant consideration it was bound to take into account, in that it failed to have regard to the ULLS Model Terms. 

45. The first form of the complaint ((a) above) is procedural ultra vires that is reflected in s 5(1)(b) of the ADJR Act – “that procedures that were required by law to be observed in connection with the making of the decision were not observed”. The procedure which ACCC is alleged to have failed to observe is the requirement in s 152AQB(9), that ACCC have regard to a determination made under s 152AQB, in this case, the 2003 ULLS Model Terms.

46. The second form of the complaint ((b) above) is a failure to take into account a relevant consideration, that is reflected in s 5(1)(e) coupled with s 5(2)(b) of the ADJR Act – improper exercise of a statutory power in the form of a failure to take into account a relevant consideration. The relevant consideration is again that specified in s 152AQB(9), namely, the 2003 ULLS Model Terms.

47. The ULLS Model Terms ground is pressed as Ground 3 in the Optus, XYZed, PowerTel and Request ULLS proceedings, and as Ground 4 in the Primus and Macquarie ULLS proceedings.

48. As noted at [12] above, although the Chime ULLS proceeding is the representative proceeding in respect of all other grounds of review concerning the ULLS, it is the Optus proceeding that is the representative proceeding in respect of the ULLS Model Terms ground. Telstra no longer presses this ground in the Chime ULLS proceeding. Notwithstanding this, the parties’ submissions frequently refer to “Chime”. In fact, Chime’s written submissions include submissions relating to the ULLS Model Terms ground, apparently because they were prepared before Telstra abandoned that ground in the Chime proceeding. For convenience I will also from time to time refer to certain submissions as having been made by Chime, but it will be understood that they are in fact made on behalf of PowerTel, Request, Primus and Macquarie, and that Telstra no longer presses the present ground in the Chime proceeding.

49. Independent submissions were made by Optus.

50. ACCC made no submissions in relation to the present ground.

    Legislation

51. Section 152AQB of the Act relevantly provides:

    (1)For the purposes of this section, each of the following declared services is a core service:

    …

    (c) the unconditioned Local Loop Service [ie the ULLS] (as described in the relevant declaration)

    (2)The Commission must make a written determination setting out model terms and conditions relating to access to each core service.

    …

    (8)Unless sooner revoked, a determination under this section relating to a particular core service ceases to be in force at the end of:

    (a)the period of 5 years beginning on the day on which the determination was made;  or

    (b)if a longer period is specified in the regulations in relation to the determination – that longer period.

    (9)The Commission must have regard to a determination under this section if it is required to arbitrate an access dispute under Division 8 in relation to a core service covered by the determination.

    (10)A determination under this section has no effect to the extent that it is inconsistent with:

    (a) any Ministerial pricing determination; or

    (b) any determination under section 152AQA.

1. Section 152AQA, referred to in subs (10), provides in subs (2) that the Commission must determine principles relating to the price of access to a declared service.

2. No regulation under subs (8)(b) has been made.  Accordingly, unless sooner revoked, a determination under s 152AQB ceases to be in force at the end of the period of 5 years beginning on the day on which the determination was made (subs (8)(a)).  The ULLS Model Terms were made in October 2003 (the evidence does not reveal the precise date in that month).  Accordingly, the period of five years expired in October 2008.

3. Section 152AQB was inserted into Part XIC of the Act by the Telecommunications Competition Act 2002 (Cth), s 3, Sch 2, Item 2. Telstra points to comments made in the Explanatory Memorandum relating to the Bill for that Act, which show that the purpose of s 152AQB was, through the making of model terms and conditions, to provide certainty as to ACCC’s views on the terms and conditions of access that any FD made by ACCC in an arbitration under Div 8 would be expected to reflect. Indeed, the Explanatory Memorandum stated:

   If a dispute about terms and conditions … arose between parties, any subsequent ACCC arbitration decision (determinations) would be expected to reflect the model terms and conditions.

   …

   This option overcomes the uncertainty that currently exists prior to regulatory arbitrations as to what the ACCC’s likely views may be concerning the eventual terms and conditions of access.

4. In relation to s 152AQB(9), the Explanatory Memorandum stated, inter alia:

   While these model terms and conditions will not be binding, they will provide clear guidance about the regulator’s views as to what fair terms and conditions for access would be, including price.  The model terms and conditions would be based on an assessment of the current market conditions and would be in a form that could be easily incorporated into an access undertaking.  If a dispute about terms and conditions then arose between parties, any subsequent ACCC arbitration decision (determination) would be expected to reflect the model terms and conditions.

   The 2003 ULLS Model Terms

5. In the 2003 ULLS Model Terms, ACCC discussed the function of model terms and conditions as follows (p 9):

   The Commission considers that model price terms and conditions will provide guidance to industry participants in several circumstances. For example, they will provide guidance to access providers and seekers involved in negotiating the terms and conditions of access to the core services, particularly as they would be taken into account by the Commission in any arbitration of access disputes that arise from such negotiations. As well, it is expected that these model terms and conditions would also guide to [sic] carriers considering providing access undertakings to the Commission in respect of core services.

   The availability of model terms and conditions is designed to overcome any regulatory uncertainty industry participants may have prior to regulatory arbitration of disputes. Parties will therefore have an up-front view of the likely outcome of a particular issue thereby encouraging the parties to reach commercial agreement on access or by access undertaking.  [The second paragraph was taken from the Commonwealth’s Explanatory Memorandum relating to the Telecommunications Competition Bill 2002, HR, 2002, at pp 2, 32]

6. The ULLS Model Terms contained “indicative” monthly access charges for the ULLS in respect of the period from 1 July 2003 to 30 June 2006, ie the 2003-04, 2004-05 and 2005-06 financial years. Although ACCC had power also to set indicative prices for the 2006-07 and 2007-08 financial years (see s 152AQB(8)(a) set out at [75] above), it did not do so. Its construction of s 152AQB(8)(a) was that while a determination under s 152AQB remained in force for at least five years, ACCC had a discretion as to the number of years within that period for which indicative prices might be published, and it gave reasons for limiting the duration of the ULLS Model Terms to three years only (p 11).

7. The indicative prices for the ULLS were set out in Ch 14 of the ULLS Model Terms, which was headed “Model access prices for ULLS” and provided:

   The following are the indicative starting prices for the ULLS for the 2003-04, 2004-05 and 2005-06 financial years:

   Table 14.1: Model ULLS access prices ($ per SIO [Service in Operation]) for 2003-04, 2004-05 and 2005-06

Indicative monthly total
Band 1	13
Band 2	22
Band 3	40
Band 4	100

…

The remaining two paragraphs of Ch 14 need not be set out.  They provided for, inter alia, an adjustment mechanism for the years 2004-05 and 2005-06.

1. Bands 1 to 4 are references to a progression of geographical areas ranged according to the number of SIOs within them. 

   The 2007 ULLS Pricing Principles

2. The instrument that determined the 2007 ULLS Pricing Principles was dated 21 November 2007 and stated that the determination started on the day on which it was made, 21 November 2007 The determination was registered in the Federal Register of Legislative Instruments. Section 5(3) of the Legislative Instruments Act 2003 (Cth) (LI Act) provides that it is taken by virtue of that registration to be a legislative instrument. Section 12(1)(a) of the LI Act had the effect that the determination took effect from the day specified in the instrument for the purpose of its commencement – in the present case 21 November 2007. All of the ULLS FDs were made after 21 November 2007.

3. The 2007 ULLS Pricing Principles were contained in Schedule 1 to the determination and were as follows:

   •         a TSLRIC+ Pricing principles [sic] should be applied to the ULLS.

   •a specific cost component should be included in the ULLS monthly price, calculated by combining ‘ULLS specific costs’ with ‘LSS specific costs’ and Telstra’s internal equivalent costs for ADSL, and allocating those costs across the number of active ULLS, LSS and ADSL lines.

   •         the ULLS charges should be geographically de-averaged.

   •connection charges should be set with reference to the amounts charged by third party contractors to Telstra for jumpering work in exchanges, indirect costs and back-of-house costs.

   ACCC’s reasons supporting the determination of the 2007 ULLS Pricing Principles were contained in the 2007 ULLS Pricing Principles Report.  Unlike the 2003 ULLS Model Terms, the 2007 ULLS Pricing Principles did not contain indicative prices.

4. Telstra submits, first, that the 2007 ULLS Pricing Principles do not purport to apply retrospectively and have no operation in relation to the price of access in any period prior to 21 November 2007.  Telstra submits that the effect of s 12 of the LI Act is that the ULLS Pricing Principles could only take effect prospectively.  For this reason, according to Telstra, it is not to the point to enquire into any inconsistency between the 2007 ULLS Pricing Principles and the 2003 ULLS Model Terms.

5. Telstra submits, second, as follows:

   “... the ULLS Model Terms provide indicative prices for the period July 2002 to 30 June 2006.  As at the relevant time in issue, the 2007 ULLS Pricing Principles determine only pricing principles, not indicative prices.  They refer to the 2002 ULLS Pricing Principles and events since those pricing principles were determined, and consider what principles are now appropriate.  The indicative prices referred to in paragraph 69 of the Chime Submissions were subsequently added to the 2007 ULLS Pricing Principles and commenced on 16 June 2008 (...).  This was after all of the relevant final determinations were made.  A variation to a legislative instrument made after the decisions under review were made and which only has prospective effect has no relevance to the matters here under review.

6. Telstra draws attention to the Explanatory Memorandum that was associated with the Telecommunications Competition Bill 2002 (Cth) which introduced s 152AQB into the Act (see [78]-[79] above) and made clear that the purpose of model terms and conditions was to give clear reliable guidance and certainty as to ACCC’s views on fair terms and conditions of access to a core service.

7. Chime points out that the 2007 ULLS Pricing Principles incorporate the Pooling and Allocation Method, which was not used in formulating the indicative prices found in the 2003 ULLS Model Terms. Chime submits that to this extent the 2003 ULLS Model Terms are inconsistent with the 2007 ULLS Pricing Principles, and that s 152AQB(10)(b) (set out at [75] above) produces the result that to the extent of the inconsistency the 2003 ULLS Model Terms had no effect once the 2007 ULLS Pricing Principles had effect..

8. Chime also points out (at para 69) that in June 2008 ACCC published Unconditioned Local Loop Service: Pricing Principles and Indicative Prices (2008 ULLS Pricing Principles and Indicative Prices), which contained new indicative prices.  Chime submits that to the extent that the 2003 ULLS Model Terms are inconsistent with the 2008 ULLS Pricing Principles and Indicative Prices (which, according to Chime, they are in their totality) the latter prevail.  In the result, according to the submission, the 2003 ULLS Model Terms, being inconsistent and incompatible with the indicative prices of 2008, cannot have any relevance.

   The Optus ULLS FD

9. In the Optus ULLS FD, ACCC determined the Annual Access Charges, payable monthly, that are set out in Schedule 1 to that FD as follows:

   1. Except where the parties subsequently agree otherwise, the ULLS Annual Charges payable by Optus to Telstra per month for the ULLS for the period from the price calculation date until the expiry date are as follows:

Band	2005-06	2006-07	2007-08
Band 1	$5.60	$6.00	$6.20
Band 2	$12.30	$13.70	$14.30
Band 3	$25.00	$27.30	$28.50

2. This determination does not specify Annual Charges to apply in Band 4.

Commencement
3. For the purposes of this schedule the price calculation date is 18 November 2005.

1. There was a period of some seven months from 18 November 2005 (the date of commencement of negotiations (see s 152DNA(2) of the Act) to 30 June 2006 during which the Optus ULLS FD stipulated the monthly access charges payable in Bands 1, 2 and 3 (see [91] above), and the ULLS Model Terms provided for indicative monthly access charges in Bands 1, 2, 3 and 4 (see [82] above).  The indicative monthly access charges for Bands 1, 2 and 3 for 2005-06 were considerably greater than the monthly access charges for those bands for that year payable under the Optus ULLS FD, as the following comparison shows:

Band	2003 Model Terms	Optus ULLS FD
Band 1	13	5.60
Band 2	22	12.30
Band 3	40	25

The Optus ULLS FD Statement of Reasons

1. The Optus ULLS FD Statement of Reasons refers to the 2003 ULLS Model Terms in the following paragraphs (I omit footnotes but include Telstra’s responses in square brackets):

   35: The ACCC has made final pricing principles for the declared ULLS pursuant to section 152AQA of the TPA [the Act]. These pricing principles follow earlier pricing principles that the ACCC specified for the ULLS in 2002 and which it re-affirmed in its model prices determination in 2003 [a footnote refers to the ULLS Model Terms, but Telstra submits that the reference is purely a descriptive reference to the ULLS Model Terms, and does not indicate active intellectual engagement.]

   82: The ACCC considers that Part XIC of [the Act] is relevant to the making of the final determination. The ACCC considers that the following sections are of direct relevance to the making of a final determination:

   …

   · Subsection 152AQB(6) [sic - s 152AQB(9)] of the TPA, which requires that the ACCC must have regard to a model terms determination (made in accordance with subsection 152AQB(2)) if the ACCC is required to arbitrate an access dispute under Division 8 in relation to a core service.

   [Telstra submits that the reference in this paragraph is merely a passing reference and does not demonstrate an active intellectual engagement.]

   163: Subsection 152CR(2) of [the Act] allows the ACCC to have regard to additional matters.  On 28 June 2007, the ACCC sought the parties’ views on whether it should have regard to additional matters.

   164: The parties nominated:

   …

   ·the model terms and conditions

   …

   [Telstra submits that the reference in this paragraph is formalistic and does not demonstrate an active intellectual engagement.]

   165.The ACCC has had regard to these additional matters. The ACCC also has had regard to the various documents and matters that are referred to in this statement of reasons.

   [Telstra submits that the reference in this paragraph is formalistic and does not demonstrate an active intellectual engagement.]

   170:Telstra submits that backdating is unnecessary and inappropriate because:

   …

   (d)backdating would be inconsistent with published model price terms and conditions.

   175:Telstra submits that any determination on monthly prices should not be backdated in circumstances where the ACCC has previously made a determination on ULLS monthly prices and Telstra has taken these determinations [ie the ULLS Model Terms] into account in its commercial negotiations.

   [Telstra submits that this is merely recounting Telstra’s submission to ACCC and does not demonstrate an active intellectual engagement with that submission.]

   178: The ACCC is required to formulate guidelines about its approach to backdating and to have regard to those guidelines, as well as any such matters as the ACCC considers relevant [ss 152DNA(7) and (8) of the Act are footnoted].     In this arbitration, the ACCC has considered the guidelines in deciding whether to backdate.  The ACCC has also had regard to the ULLS Pricing Principles and the section 152CR criteria in deciding the terms to apply in the backdating period. 

   179: The guidelines are set out in sections 7.4.2 to 7.4.6 of the Access Dispute Guidelines [a reference to ACCC’s Access Dispute Resolution Guidelines of March 2004].

   187: The ACCC does not consider that its decision to publish Model Terms and Conditions in October 2003 means that it should not backdate in this instance. By the time the relevant negotiations between Telstra and Optus commenced (at 18 November 2005), the ACCC had clearly expressed concerns with the ULLS monthly charges of $14 in Band 1, $22 in Band 2 and $40 in Band 3 (October 2004 and August 2005) [a footnote refers to ACCC, Assessment of Telstra’s undertakings for ULLS and LSS  – Draft decision, August 2005; ACCC, Assessment of Telstra’s undertakings for PSTN, ULLS and LCS – Draft decision, October 2004].  Therefore, it could not be said that at any time during those negotiations Telstra was following any guidance the ACCC had issued.

   [Telstra says that the statement in this paragraph was made, not in relation to quantum, but in relation to backdating.]

   Consideration

   General

2. Telstra contends that s 152AQB(9) required ACCC to have regard to the 2003 ULLS Model Terms in arbitrating the access dispute but that ACCC failed to do so. The submission relates to the 2005-06 year alone, not to the 2006-07 year or 2007-08 year for which the Optus ULLS FD also fixed Annual Charges: it will be recalled that the indicative prices that formed part of the 2003 ULLS Model Terms did not extend beyond 30 June 2006 (see [81]-[82] above).

3. Telstra submits that in respect of the relevant “overlap” period, 18 November 2005 to 30 June 2006, ACCC made only fleeting reference to the ULLS Model Terms and did not have an active intellectual engagement with them, in particular with their indicative prices.

4. ACCC’s power to make an FD is found in s 152DNA(1).  I discussed the power to backdate in the Earlier Reasons at [552]ff.

5. ACCC determined the Annual Access Charges payable monthly in cl 1 of Sch 1 to the Optus ULLS FD (set out at [91] above) pursuant to the power given to it by s 152CP(1). The FD would normally have taken effect 21 days after the FD was made (on 21 April 2008): s 152DN(1). In exercising the power under s 152CP(1), ACCC was required to have regard to each of the matters referred to in s 152CR(1), the ULLS Pricing Principles (see s 152AQA(6)) and, subject to s 152AQB(10)(b), the ULLS Model Terms (see s 152AQB(9)).

6. The provision of cl 1 of Sch 1 was backdated by cl 3 to take effect from the date of commencement of negotiations, 18 November 2005, pursuant to ACCC’s power given by s 152DNA(1) as constrained by s 152DNA(2).  In exercising the backdating power, ACCC was required to have regard to any guidelines made under s 152DNA(8) and any other matters that ACCC considered relevant (s 152DNA(7)), the ULLS Pricing Principles (s 152AQA(6)) and the ULLS Model Terms (s 152AQB(9)). 

7. Guidelines made by ACCC pursuant to s 152DNA(8) are found in section 7.4 of ACCC’s Access Dispute Resolution Guidelines of March 2004.  Paragraph 7.4.2 of the Access Dispute Guidelines is of particular relevance.  It provides:

   7.4.2 Approach to backdating

   Given that the backdating provision is intended to improve incentives, the ACCC will, in general, be inclined to backdate determinations. That said, each case must be considered on its merits. In particular, the ACCC is likely to consider whether the manner in which the parties have conducted themselves before and during the arbitration provides grounds for not backdating the determination.

   For instance, if before notification of the dispute, the access provider offered the access seeker price and non-price terms and conditions that are substantially similar to those determined by the ACCC and the access seeker refused, then it may not be appropriate to backdate. Considering the parties’ conduct in this way improves incentives for the access provider to offer reasonable price and non-price terms and conditions, and reduces incentives for the access seeker to notify a dispute in the hope that the final price will be lower and backdated.

   Similarly, if the access seeker has been tardy in responding to offers put forward by the access provider, then it may not be appropriate to backdate to the start of negotiations.

   To minimise incentives for delay during the arbitration, the ACCC may indicate at the outset whether it is likely to backdate the final determination. However, the ACCC would expect to reconsider this issue towards the conclusion of the arbitration to see if there are any grounds for modifying its views on backdating.

   The Act provides flexibility about the nature of the retrospective terms and conditions.  In some circumstances it may be appropriate to provide that the same charges apply retrospectively and prospectively, while in others it may be better to have separate retrospective and prospective charges. For instance, if a price is cost-based, it may be appropriate to determine retrospective charges based on costs for the relevant year rather than current costs. These are matters on which the ACCC is likely to seek submissions from the parties.

8. Telstra submits that while ACCC may have considered the 2003 ULLS Model Terms in deciding whether to backdate all or any of the provisions of the Optus ULLS FD (ie whether to exercise its power under s 152DNA(1)), it did not do so when deciding the quantum of the Annual Access Charges that applied in the 2005-06 year (ie in exercising its power under s 152CP(1)).  For instance, ACCC could have set those access charges at a level equivalent to the indicative prices found in the 2003 ULLS Model Terms.

9. The question is whether ACCC did “have regard to” the 2003 ULLS Model Terms in arbitrating the Optus ULLS access dispute, in particular, in determining the Annual Access Charge payable monthly in the 2005-06 period (in effect, the period from 18 November 2005 to 30 June 2006). The statutory obligation imposed on ACCC by s 152AQB(9) to have regard to the ULLS Model Terms was enlivened by nothing more than the fact that ACCC was required to arbitrate an access dispute under Div 8 in relation to the ULLS.

   Telstra’s submissions to ACCC in relation to the access charges in the 2005-06 period

1. ACCC submits that it was entitled to have regard to the 2002 LSS Pricing Principles by reasons of s 152CR(2), just as it was bound to have regard to the 2007 LSS Pricing Principles by reason of s 152AQA(6).

2. ACCC submits that when exercising its power to backdate the Adam LSS FD, s 152DNA(7) allowed it to have regard to matters it considered relevant and those matters included, in the circumstances, the 2007 LSS Pricing Principles. Finally, ACCC submits that it is not the case that s 152AQA(6) gives anyone an accrued right to have an access arbitration determined in accordance with pricing principles that were current at the time of notification of the access dispute or at any other time. ACCC refers to Esber v Commonwealth (1992) 174 CLR 430 at 440.

   Consideration

   Ground 2(a)

3. The way in which Telstra’s Ground 2(a) was expressed in the amended application for an order of review in the Adam proceeding does not sit comfortably with the way in which Telstra’s submissions were put.  In the amended application, Ground 2(a) depended on the invalidity in whole or in part of the 2007 LSS Pricing Principles: see [400]–[401] above.  The invalidity was said to arise from the fact of the continuing and operative 2002 LSS Pricing Principles or from inconsistency between them and the 2007 LSS Pricing Principles. 

4. Telstra’s submission, however, is that ACCC erred by having regard to both the 2002 and 2007 LSS Pricing Principles.

5. For the reasons that I will give in relation to Ground 2(b) at [480]ff below, I do not accept that the 2007 LSS Pricing Principles were invalid.  Therefore, I do not think that Ground 2(a) as it was formulated in Adam’s amended application for an order of review is made out. 

6. Did ACCC err by having regard to both the 2002 and 2007 LSS Pricing Principles? It is important to note that s 152AQA(6) requires no more than that ACCC “have regard to” a determination of pricing principles, not that it implement or apply them.

7. ACCC paid close attention to the similarities and differences as between the 2002 and 2007 LSS Pricing Principles. Paragraph 68 of the Adam LSS FD Statement of Reasons (referred to at [427] above) was as follows:

   The Commission is required to have regard to the LSS pricing principles in an arbitration.  While the 2002 and 2007 LSS pricing principles share common elements, the 2007 LSS pricing principles introduced particular changes.  These were in the nature of refining the existing principles or adding points and detail.  The 2007 LSS pricing principles also include indicative prices.  This reflects the further regulatory consideration that has been given to the LSS following its declaration in 2002.

8. The reference to “the further regulatory consideration” may have been a reference to the Request, Primus and Chime arbitrations that were the subject of the Earlier Proceedings.

9. It is noteworthy that Telstra itself encouraged ACCC to have regard to the 2007 LSS Pricing Principles.  At [65] of the Adam LSS FD Statement of Reasons ACCC observed:

   Telstra notes there is a discrepancy between the prices set out in the [Adam] DFD and the Commission’s indicative LSS single connection and disconnection charges for 2007-08 that are provided in 2007 LSS pricing principles.  Telstra submits that the indicative prices in the 2007 LSS pricing principles are likely to be more current than those in the DFD and the Commission should update its estimates to be consistent with the indicative prices.

10. ACCC considered that it was required by s 152AQA(6) to have regard to the 2007 LSS Pricing Principles and was permitted by s 152CR(2) to have regard to the 2002 LSS Pricing Principles. In my opinion, ACCC was correct in both respects. Section 152CR(2) permitted ACCC to have regard to pricing principles that, for whatever reason (including implied revocation), were not in force at the time of the making of the Adam FD, subject to ACCC’s considering them to be relevant.

11. It is true that in the light of the mandatory nature of s 152AQA(6), it would seem odd if ACCC treated the two sets of pricing principles indiscriminately. Even apart from that provision, the more recently determined pricing principles represent ACCC’s current or latest thinking. But the evidence does not suggest that ACCC failed to distinguish between the two. ACCC noted (at [74]-[80] of the Adam LSS FD Statement of Reasons) the ways in which the same issues were addressed in the 2002 and 2007 LSS Pricing Principles. In each instance of difference, ACCC preferred the more recent 2007 LSS Pricing Principles.

12. It may be difficult to conceive of ACCC deriving much assistance, except by way of historical explanation, from the 2002 LSS Pricing Principles in relation to a future period in respect of which the 2007 LSS Pricing Principles superseded the 2002 LSS Pricing Principles, that is to say, a period after 15 December 2007.  In relation to a past period, however, ss 152DNA(1) and (2) make it clear that ACCC has a power to backdate to a specified date not earlier than the date of commencement of negotiations, and therefore make it clear that, by that indirect route, the 2007 LSS Pricing Principles can be taken into account even in relation to a period prior to the term of their currency.

13. It follows that Telstra’s contention that the 2002 and 2007 LSS Pricing Principles each operated during a period to the exclusion of any possibility of consideration of the other for any purpose should not be accepted.

14. It is important to recall the special nature of an arbitration under Div 8 of Pt XIC of the Act. ACCC is not determining the outworking of existing legal rights and obligations but creating new ones. It is expressly required by s 152CR(1) to take into account considerations that go beyond matters peculiar to the immediate parties’ interest, such as the promotion of the LTIE and the rights of all persons who have rights to use the declared service (the date of commencement of negotiations, however, is peculiar to the parties to the particular negotiation). The unusual character of a Div 8 arbitration explains the breadth of the matters that ACCC is able to take into account in arriving at its determination in the arbitration.

15. Ground 2(a), either as expressed in the amended application for an order of review, or as reshaped in Telstra’s submissions, is not made out. 

    Ground 2(b)

16. Telstra accepts that ACCC had an implied power to revoke the determination of the 2002 LSS Pricing Principles, under s 33(3) of the AI Act which provides that where an Act confers a power to make, grant or issue any instrument, “the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument”.  Section 46 of the same Act provides that that Act applies to instruments made by an authority even if the instrument is not a legislative instrument within the meaning of the LI Act and is not a rule of court.  I need not discuss the LI Act here:  I discussed certain of its provisions in a different context at [84] and [443] above.

17. The 2007 LSS Pricing Principles did not expressly revoke the 2002 LSS Pricing Principles.  It is well established, however, that the making of a later statutory instrument that is inconsistent with an earlier one revokes the earlier one to the extent of the inconsistency:  see, for example Ward v Repatriation Commission (1997) 46 ALD 454 at 461 and the authorities there referred to, as well as Caloundra City Council v Netstar Pty Ltd [2008] 1 Qd R 258 at [8]-[14].

18. In my view the determination of the 2007 LSS Pricing Principles by necessary implication revoked determination of the 2002 LSS Pricing Principles in toto and not merely to the extent of the inconsistency.  This view is supported by the following considerations:

    ·the 2007 LSS Pricing Principles evince an intention to deal comprehensively with the principles relating to the price of access to the LSS, i.e. to cover the subject matter that had been the subject matter of the 2002 LSS Pricing Principles, namely, the “principles relating to the price of access to a declared service [the LSS]” (cf s 152AQA(1) of the Act, and see on the implied repeal of legislation Mitchell v Scales (1907) 5 CLR 405 at 417; Goodwin v Phillips (1908) 7 CLR 1 at 7, 10);

    ·the 2002 and 2007 LSS Pricing Principles were made in exercise of the same statutory power;

    ·the LSS Declaration Review considered the 2002 LSS Pricing Principles and subsequent events, and discussed at length and comprehensively in the light of them the question of “appropriate pricing principles” to be determined;

    ·the 2007 LSS Pricing Principles re-stated the first of the 2002 LSS Pricing Principles rather than leaving it to remain stated in the 2002 LSS Pricing Principles.

19. If I am wrong in my conclusion that the determination of the 2007 LSS Pricing Principles impliedly revoked the determination of the 2002 LSS Pricing Principles in toto, then I would hold that the later determination impliedly revoked the earlier one to the extent of any inconsistency.

20. The fact that the 2007 LSS Pricing Principles revoked in whole or in part the 2002 LSS Pricing Principles does not mean, however, that ACCC was not at liberty under s 152CR(2) to take the earlier pricing principles into account.  Even parts that were definitely supplanted by the later instrument still existed in the sense that they provided historical background and understanding of the 2007 LSS Pricing Principles, as well as a general discussion of arguments for and against particular pricing principles.

    Ground 2(c) 

21. I accept that the 2007 LSS Pricing Principles do not apply directly to any period prior to 15 December 2007.  The operative terms of the determination are that the pricing principles and price-related terms and conditions “are to apply to the Line Sharing Service (LSS)”.  The words “are to apply” suggest an operation in respect of future periods.  An alternative construction is that, when dealing with the LSS in the future, one is required to regard the 2007 LSS Pricing Principles as associated with it.

22. There is nothing in Part 1 (Pricing Principles) of Schedule 1 of the 2007 LSS Pricing Principles to assist in the choice between these two constructions.  The indicative prices in Part 2, however, are all set in respective periods commencing on 1 January 2008.

23. In my view the former construction is the correct one.  It gives better effect to the presumption against retrospectivity.  The 2007 LSS Pricing Principles are to operate and have effect in respect of prices to be charged in respect of future periods, that is to say, periods after 15 December 2007.

24. ACCC’s approach in the Adam LSS FD Statement of Reasons was consistent with the view that the 2007 LSS Pricing Principles operated only in futuro and that s 152AQA(6) required it to have regard to them only in relation to the period after 15 December 2007.

25. The backdating issue was dealt with at some length by ACCC at [176]-[195] of the Adam LSS FD Statement of Reasons: at [183]-[187] in respect of annual charges, at [188]-[191] in respect of connection and disconnection charges, and at [192]-[195] in respect of MNM charges.  In relation to annual charges, ACCC stated (at [183]) that they should be backdated to take effect from 14 July 2006, being the date of the teleconference between the parties concerning LSS charges when, as both parties acknowledged, the question of the LSS Annual Charges payable by Adam was raised.  This was followed by an email on 27 July 2006 from Adam to Telstra seeking review of the LSS Annual Charge. 

26. After several paragraphs, ACCC stated (at [187])  that in deciding the quantum of the LSS Annual Charge to apply during the backdated period, it had considered the s 152CR(1) criteria and the 2002 and 2007 LSS Pricing Principles.

27. At [188]-[191] ACCC gave reasons for its decision to backdate the connection and disconnection charges to 2 June 2005, the date Adam e-mailed Telstra requesting a review of those charges.  Again ACCC stated (at [191]) that it had considered the s 152CR(1) criteria and the 2002 and 2007 LSS Pricing Principles.

28. Similarly, ACCC concluded that the MNM charges should be backdated to 9 June 2005, being a date on which Adam and Telstra were negotiating the MNM charges.  At [195] ACCC stated that it had considered the s 152CR(1) criteria and the 2002 and 2007 LSS Pricing Principles.

29. There is nothing in the Adam LSS FD Statement of Reasons suggesting that ACCC considered that s 152AQA(6) made it mandatory for it to have regard to the 2007 LSS Pricing Principles in relation to the backdated period. ACCC correctly acknowledged (at [176]) however, that it was required by s 152DNA(7) to have regard to backdating guidelines formulated under s 152DNA(8) (the backdating guidelines were found in sections 7.4.2 to 7.4.6 of the Access Dispute Guidelines).

30. ACCC was at liberty when exercising the backdating power to have regard to such other matters as ACCC considered relevant:  see s 152DNA(7)(b).  It did so when it had regard to the 2007 LSS Pricing Principles.

31. In one way or another, Telstra’s Ground 2(c) would constrain the power to backdate given by s 152DNA(1).  There is a tension between that power on the one hand, and the facts that during the backdated period:

    ·the parties would have had only the then-existing pricing principles (i.e. the 2002 LSS Pricing Principles) to guide them;

    ·the parties may have entered into contractual arrangements in reliance on those pricing principles creating rights and obligations; and

    ·in making any interim determination under s 152CPA, ACCC would have been required by s 152AQA(6) to have regard to those pricing principles.

    However, subject to the limitations found in s 152DNA itself (see subs (2) and (7)) and those imposed by general law principles on discretionary and administrative decision-making, in my opinion the power to backdate must be given full effect.

32. Ground 2(c) is not established.

    GENERAL CONCLUSION

33. The parties asked that I publish reasons but refrain from making orders at this stage.  The reason for the request was that the parties wished to have the opportunity to check whether the reasons contained any confidential information in respect of which an application for a suppression order might be made.  I have taken care to ensure that they do not.

34. All 14 applications should be dismissed with costs.

I certify that the preceding four hundred and ninety-eight (498) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated:       17 July 2009

Telstra Corporation Limited v ACCC and Optus Networks Pty Limited (proceeding NSD 717/2008) and XYZed Pty Limited (proceeding NSD 529/2008):
Counsel for the Applicant:	Dr J E Griffiths SC and Ms M N Allars
Solicitors for the Applicant:	Mallesons Stephen Jaques
Counsel for the First Respondent:	Mr J S Hilton SC and Mr M H O'Bryan
Solicitor for the First Respondent :	Australian Government Solicitor
Counsel for the Second Respondents:	Mr A Robertson SC and Mr S J Free
Solicitors for the second Respondents:	Clayton Utz

Telstra Corporation Limited v ACCC and Agile Pty Ltd (proceeding NSD 69/2008), Adam Internet Pty Limited (proceeding NSD 70/2008), Primus Telecommunications Pty Limited (proceeding NSD 72/2008), Amcom Pty Ltd (proceeding NSD 73/2008) NetworkTechnology (Aust) Pty Ltd (proceeding NSD 75/2008), Primus Telecommunications Pty Limited (proceeding NSD 78/2008), Macquarie Telecom Pty Limited (proceeding NSD 105/2008, PowerTel Limited (proceeding NSD 531/2008), Request Broadband Pty Ltd (proceeding NSD 533), Chime Communications Pty Ltd (proceeding NSD 718/2008) and Primus Telecommunications Pty Limited (proceeding NSD 719/2008)
Counsel for the Applicant:	Dr J E Griffiths SC and Ms M N Allars
Solicitors for the Applicant:	Mallesons Stephen Jaques
Counsel for the First Respondent:	Mr J S Hilton SC and Mr M H O’Bryan
Solicitor for the First Respondent :	Australian Government Solicitor
Counsel for the Second Respondents:	Ms M Sloss SC and Mr M J Hoyne
Solicitors for the Second Respondents, except Macquarie Telecom Pty Limited:	Herbert Geer
Solicitors for Macquarie Telecom Pty Limited:	Nicholls Legal

Telstra Corporation Limited v ACCC and TPG Internet Pty Ltd (proceeding NSD 77/2008))
Counsel for the Applicant:	Dr J E Griffiths SC and Ms M N Allars
Solicitors for the Applicant:	Mallesons Stephen Jaques
Counsel for the First Respondent:	Mr J S Hilton SC and Mr M H O’Bryan
Solicitor for the First Respondent:	Australian Government Solicitor
Counsel for the Second Respondent:	Mr M J Hoyne
Solicitors for the Second Respondent:	Nicholls Legal
Dates of Hearing:	25, 26, 27 August, 8, 9, 10, 11, 12, 19 September 2008
Date of Judgment:	17 July 2009

ANNEXURE

Acronyms and Terms

2002 LSS Pricing Principles	Pricing principles made by ACCC pursuant to s 152AQA of the Act in August 2002 (set out in Ch 7 of the LSS Declaration Final Report).
2002 ULLS Pricing Principles	Pricing principles for the ULLS that were contained in Chapter 4 of ACCC’s final report on pricing methodology for the ULLS that was published in March 2002.
2003 ULLS Model Terms	See ULLS Model Terms
2007 LSS Pricing Principles	Pricing principles made by ACCC pursuant to s 152AQA of the Act, by an instrument that was dated 24 October 2007, and registered in the Federal Register of Legislative Instruments on 14 December 2007, supported by reasons in Ch 3 of the LSS Declaration Review.
2007 ULLS Pricing Principles	Pricing principles for the ULLS determined by ACCC under s 152AQA of the Act on 21 November 2007 in Pricing Principles for the Unconditioned Local Loop Service.
2007 ULLS Pricing Principles Report	ACCC’s report of November 2007 on pricing principles in relation to the ULLS to be made pursuant to s 152AQA of the Act – see 2007 ULLS Pricing Principles.
2008 ULLS Pricing Principles and Indicative Prices	Pricing principles and indicative prices for the ULLS determined by ACCC under s 152AQA of the Act in June 2008 in Unconditioned Local Loop Service: Pricing Principles and Indicative Prices.
AAAP	Amcon, Adam, Agile and Primus, four access seekers who made a joint submission in the ACCC arbitrations.
ACCC	Australian Competition and Consumer Commission, the first respondent (also referred to as the Commission).
Access Dispute Resolution Guidelines	ACCC’s Resolution of telecommunications access disputes – a guide (revised version) made in March 2004, sections 7.4.2 to 7.4.6 of which contained backdating guidelines formulated under s 152DNA(8).
Access provider	Carrier or carriage service provider that supplies declared services to itself or other persons – see s 152AR of the Act. For present purposes the only relevant access provider is Telstra.

access seeker	A service provider that makes, or proposes to make, a request for access to a declared service under s 152AR of the Act. In each of the present fourteen proceedings, the second respondent is an access seeker.
ACIF	Australian Communications Industry Forum.
Act	Trade Practices Act 1974 (Cth).
Adam	Adam Internet Pty Limited, the second respondent in proceeding NSD 70/2008.
ADC	Access Deficit Contribution.
ADJR Act	Administrative Decisions (Judicial Review) Act 1977 (Cth).
ADSL	Asymmetric Digital Subscriber Line.  A compression technology that supports high speed digital services over conventional copper telephone lines.
Agile	Agile Pty Ltd, the second respondent in proceeding NSD 69/2008.
AI Act	Acts Interpretation Act 1901 (Cth)
Amcom	Amcom Pty Ltd, the second respondent in proceeding NSD 73/2008.
Annual Access Charges	The annual charge payable for access to a declared service, often payable monthly and sometimes referred to as a monthly access charge.
Broadband	Imprecise, but often used to refer to telecommunications capable of providing multiple channels of data over a single communications medium, typically using some form of frequency or wave division multiplexing.
CAN	Customer Access Network. The portion of the PSTN which comprises the transmission system connecting customers to an aggregation point within the network (usually a local exchange building). In Australia, that connection is normally achieved by copper wire pairs.
CDNO	Call Diversion (Number Only).
Chime	Chime Communications Pty Ltd, the second respondent in proceeding NSD 718/2008.
Churn	The transfer of a telecommunications customer from one provider to another, such as from Telstra to Request or from Request to Chime or from Adam to Telstra.
CRA	Customer Relationship Agreement

DFD	A Draft Final Determination that is provided by ACCC to Telstra and an access seeker in an arbitration under Div 8 of Pt XIC of the Act, on which they are invited to make submissions.
DFD Consultation Paper	A consultation paper that is provided by ACCC to the parties to an access dispute arbitration, accompanying ACCC’s DFD in that arbitration.  See DFD.
DFD Supplementary Consultation Paper	DFD supplementary consultation paper issued by ACCC to the parties to the ADAM LSS arbitration on 7 November 2007.
DSL	Digital Subscriber Line.  DSL services are provided over the high frequency spectrum of a ULL.
DSLAM	Digital Subscriber Line Access Multiplexer
D-ULLS (or DULLS)	Diversion ULLS.  A species of call diversion that is required in the context of ULLS ordering and provisioning.
Earlier Reasons	The reasons of the Court in Telstra Corporation Ltd v Australian Competition & Consumer Commission  (2008) 171 FCR 174
End-user	A retail customer of a service provider.
FD	Final Determination. It is the various FDs in the 14 arbitrations under Div 8 of Pt XIC of the Act that are the subject of Telstra’s challenge in the 14 proceedings.
FD Statement of Reasons	A statement of ACCC’s reasons supportive of, and accompanying, an FD.
Findings or Four Findings	The four factual findings made by ACCC in each LSS arbitration, identified as “Findings 1,2,3 and 4” or “the Findings” or “the Four Findings”
LI Act	Legislative Instruments Act 2003 (Cth)
Local loop	Line between end-user’s premises and a local exchange.
LNP	Local Number Portability.
LSS	Line Sharing Service (also known as the High Frequency Unconditioned Local Loop Service).  The LSS was defined in the LSS Extension Declaration (the definition appears at [20] in these reasons).
LSS Annual Charge	Annual charge made or to be made by Telstra to the access seekers for access to the LSS, payable monthly, and sometimes referred to as “LSS monthly charge.”

LSS Declaration	Declaration of the LSS as a declared service under s 152AL of the Act with effect on 16 October 2002.  With effect from 3 December 2003, the expiry date of the LSS Declaration was extended to 31 October 2007.  By the LSS Extension Declaration, the expiry date of the LSS Declaration was further extended to 31 July 2009 (see LSS Extension Declaration).
LSS Declaration Final Report	ACCC’s Line Sharing Service: Final Decision on whether or not a Line Sharing Service should be declared under Pt XIC of the Trade Practices Act 1974 published in August 2002 following ACCC’s inquiry into whether or not an LSS should be declared under Pt XIC of the Act.
LSS Declaration Review	ACCC’s Review of the LSS Declaration published in October 2007 which supported extension of the expiry date of the LSS Declaration resulting in the LSS Extension Declaration, and which contained in chapter 3 ACCC’s reasons for the 2007 LSS Pricing Principles.
LSS Extension Declaration	This declaration of ACCC dated 26 October 2007 and published in the Gazette on 29 October 2007 extended the expiry date of the LSS Declaration from 31 October 2007 to 31 July 2009.
LSS Monthly Charge Undertaking Assessment	See ULLS and LSS Monthly Charge Undertaking Assessment.
LSS Pricing Principles or 2007 LSS Pricing Principles	Pricing principles determined by ACCC in relation to the LSS pursuant to s 152AQA of the Act. The 2002 LSS Pricing Principles were set out in Ch 7 of the LSS Declaration Final Report. The 2007 LSS Pricing Principles were determined by an instrument dated 24 October 2007 that was registered in the Federal Register of Legislative Instruments on 14 December 2007 with effect on and from 15 December 2007.
LTIE	Long-term interests of end-users.  The object of Pt XIC of the Act is to promote the LTIE (s 152AB(1)) and the LTIE is a matter that ACCC must take into account in making a final determination in resolution of a dispute over access to a declared service (s 152CR(1)(a)).
Macquarie	Macquarie Telecom Pty Limited, the second respondent in proceeding NSD 105/2008.
MNM	Managed Network Migration.  A transfer or migration of services that is achieved by a coordinated cancellation and connection of services – to be distinguished from “single” disconnections and connections.
Narrowband	A reference to the low frequency spectrum or voiceband frequency spectrum.
Network	Network Technology (Aust) Pty Ltd, the second respondent in the proceeding NSD 75/2008.
Optus	Optus Networks Pty Limited, the second respondent in Proceeding NSD 717/2008.
PowerTel	PowerTel Limited, the second respondent in proceeding NSD 531/2008.
Pooling and Allocation Method	A method of arriving at the specific cost component to be included in the Annual Charge for access to the LSS according to which the specific cost of providing access to the LSS is pooled with the specific cost of providing access to the ULLS and Telstra’s internal equivalent cost for ADSL, and the pool is allocated across the number of active LSS, ULLS and ADSL lines.
Primus	Primus Telecommunications Pty Limited, the second respondent in proceedings NSD 72/2008, 78/2008 and 719/2008.
PSTN	Public Switched Telephone Network.  The switched telephone telecommunications network to which public customers can be connected. The infrastructure for basic telecommunications services (including telephones, switches, local and trunk lines, and exchanges), enabling any customer to call and communicate with any other customer.
Request	Request Broadband Pty Ltd, the second respondent in proceeding NSD 533 of 2008.
SAOs	Standard access obligations provided for in s 152AR of the Act.
Service provider	The provider of a service to an end-user.  The service provider will previously have been an access seeker in respect of a declared service.
SIO	Service in operation.
Telephony	A generic term describing voice telecommunications.
Telstra	Telstra Corporation Limited, the applicant in each of the 14 proceedings.
TPG	TPG Internet Pty Ltd, the second respondent in proceeding NSD 77/2008.
Tribunal	Australian Competition Tribunal
TSLRIC	Total Service Long-Run Incremental Cost.
TSLRIC+	TSLRIC plus a contribution to indirect and overhead costs.
TSLRIC++	TSLRIC+ plus an additional amount as an ADC.

ULL	Unconditioned Local Loop.  The bare or unqualified wire between the end-user’s premises and the local exchange.  The LSS and the ULLS are both provided over the ULL.
ULLS	Unconditioned Local Loop Service. The ULLS was defined in the ULLS Re-Declaration (the definition appears at [21] of these reasons).
ULLS Declaration	Declaration of the ULLS as a declared service under s 152AL with effect on 11 August 1999, by an instrument dated 4 August 1999 that was gazetted on 11 August 1999. The description of the ULLS as declared was varied by an instrument dated 18 May 2000 that was gazetted on 24 May 2000 with effect on that date.  By an instrument dated 28 July 2006 that was gazetted on 9 August 2006, ACCC re-declared the ULLS as a declared service with effect on 1 August 2006 and expiring on 31 July 2009.
ULLS Model Terms (or 2003 ULLS Model Terms)	Model terms and conditions relating to the ULLS made by ACCC in October 2003 pursuant to s 152AQB(2) of the Act in Final Determination for Model Price Terms and Conditions of the PSTN, ULLS and LCS Services.
ULLS Monthly Charge Undertaking Assessment	ACCC’s final report of August 2006 assessing Telstra’s proferred ULLS monthly charge undertaking.
ULLS and LSS Monthly Charge Undertaking Assessment	ACCC’s final report published in December 2005 on its assessment of Telstra’s proffered ULLS and LSS monthly charge undertakings.
ULLS Pricing Principles (or 2007 ULLS Pricing Principles)	Pricing Principles applicable to the ULLS determined pursuant to s 152AQA of the Act on, and commencing on, 21 November 2007.
ULLS Re-Declaration	See the last sentence under “ULLS Declaration”.
ULLS Undertakings Discussion Paper	ACCC’s March 2005 Telstra’s Undertakings for the Unconditioned Local Loop Service.
WACC	Weighted Average Cost of Capital. A reference to the average cost to Telstra of attracting equity and loan capital investment in its business, determined in accordance with a formula.
WLR	Wholesale Line Rental service.
xDSL	The “family” of DSL services, including ADSL services.
XYZed	XYZed Pty Limited, the second respondent in proceeding NSD 529/2008.