Trade Practices Act 1974 Determination under section 152AQA Pricing Principles for the Local Carriage Service (LCS) & the Wholesale Line Rental (WLR) Service (Cth)

TRADE PRACTICES ACT 1974

Section 152AQA

Pricing Principles for the Local Carriage Service (LCS) & the Wholesale Line Rental (WLR) Service

The Australian Competition and Consumer Commission determines, pursuant to section 152AQA of the Trade Practices Act 1974 (Act), that the pricing principles and price-related terms and conditions specified in Schedules 1 and 2 are to apply to the following services declared by the Commission under section 152AL of the Act:

(a)        the Local Carriage Service

(b)        the Wholesale Line Rental Service

Notes:

1. This Determination commences on the day after registration.
2. For the effect of this determination, see subsection 152AQA(6) of the Act.

Made by the Australian Competition

and Consumer Commission on

30 July 2008

-----------------------------------------

Graeme Samuel

Chairman
SCHEDULE 1 – Local Carriage Service (LCS)

Part 1 – Pricing Principles

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

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

Ÿ          unbundled benchmark retail prices, and

Ÿ          separate pricing of the LCS.

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

Part 2 – Price-related terms and conditions

Indicative prices for LCS (1 January 2008 – 31 July 2009)

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

SCHEDULE 2 – Wholesale Line Rental (WLR) Service

Part 1 – Pricing Principles

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

Ÿ          avoidable retail costs for the WLR rather than avoided retail costs

Ÿ          unbundled benchmark retail prices, and

Ÿ          separate pricing of the WLR.

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

Part 2 – Price-related terms and conditions

Indicative prices for WLR (1 January 2008 – 31 July 2009)

HomeLine Part	BusinessLine Part
Telstra Retail Prices	$30.41 ex GST[1]	$31.77 ex GST[2]
Unit Avoidable Retail Costs	$4.84/mth	$4.84/mth
Indicative Price	$25.57	$26.93

[1]      Telstra Corporation Limited, Our Customer Terms, 11 January 2008, Accessed on 22 July 2008, p. 23.

[2]      Telstra Corporation Limited, Our Customer Terms, 13 February 2008, Accessed on 22 July 2008, p. 43.