The Australian Competition and Consumer Commission today issued its pricing principles paper on the pricing principles for access to network services supplied by non-dominant networks.
The paper details the ACCC's views on the appropriate pricing methodology for the supply of declared PSTN terminating and originating services by smaller fixed network carriers. These services are used to provide a range of customer services including local, long distance, and international calls.
The ACCC's paper states that in circumstances where the ACCC is conducting an arbitration or reviewing an undertaking assessment, it is unlikely to set or accept a charge for a service that was higher than the efficient cost incurred by Telstra for the supply of an analogous service.
This approach in effect imposes a price ceiling in negotiations for the supply of PSTN originating and terminating services by a smaller or non-dominant fixed network equal to the efficient costs incurred by Telstra, as may be determined by the ACCC. The ACCC may consider the costs of the smaller network if these are shown to be significantly below those of the larger network. However, in doing so the ACCC will recognise the need for encouraging and rewarding efficient facilities-based entry.
The ACCC's pricing principles aim to ensure that outcomes promote efficient competition by encouraging efficient use and investment in infrastructure and are therefore in the long-term interest of end users.