Acces pricing release | Tell The Truth Telstra

Sydney, 02 August 2007 – Tell the Truth Telstra today called on Telstra to stop misleading the public about the cost of competitor access to its network.

Sol Trujillo, speaking at an industry function this week, again falsely claimed that Telstra is forced to provide competitors access to its network “below cost.”[1]

The Australian Competition and Consumer Commission (ACCC) has done the sums and found that competitor access to Telstra’s network is actually provided above cost.

The ACCC has several times rejected Telstra attempts to increase access prices, and argued that “Telstra's proposed pricing would significantly disadvantage facilities based access seekers…The ACCC is not satisfied that Telstra's proposed charges are based on reasonable estimates of efficient costs.”[2]

The courts have consistently rejected Telstra’s below cost argument, yet the telco continues to recycle it. In May this year, the Australian Competition Tribunal rejected Telstra's appeal to increase access prices, and affirmed the ACCC's decision of 25 August 2006 to reject Telstra's price undertakings.[3]

In its FY 05/06 annual report, Telstra reported an increase in wholesale revenues by 13 per cent and wholesale profits by 18 per cent. [4]It would not be possible to make these profits if Telstra charged competitors an access rate below cost.

The fact is that Telstra has been and continues to be one of the most profitable telcos in the world. In mid 2003, Telecom Week Global ranked Telstra in eleventh position as one of the highest valued companies in the world – at US$38 billion.[5]So why does Telstra continue to claim a loss on access prices?

Why has Telstra argued in New Zealand for the same regulation ACCC enforces in Australia, while calling Graeme Samuel a "rogue regulator"? Telstra (via TelstraClear) advocates the need for stronger regulation in New Zealand where it seeks to access monopoly network elements.[6]It argues that NZ should use the same method as Australia does to calculate regulated prices and that the regulator should choose the lowest prices possible.

The Tell the Truth Telstra (T4) campaign was launched in April 2007, to counter Telstra’s campaign of misinformation on telecommunications and broadband competition and regulation in Australia.

Tell the Truth Telstra is an initiative of Australia’s leading telecommunications carriers and Internet Service Providers (ISPs) including AAPT, Adam Internet, Austar, iiNet, Internode, Macquarie Telecom, Powertel, Primus Telecom, Telarus, TransACT, WestNet and Unwired.

The Tell the Truth Telstra initiative commenced with a united complaint to the Australian Competition and Consumer Commission (ACCC) asking it to investigate whether Telstra’s conduct amounts to misleading and deceptive conduct.

The Tell the Truth Telstra initiative documents a list of Telstra’s myths and highlights their misleading nature. An accompanying education program includes an information kit for MPs, a public Web site (http://www.tellthetruthtelstra.com/.au), and a series of information sessions for MPs, exposing the truth behind Telstra’s attempt to gain relief from regulation.

[1]Communications Day, 01 August 2007, pg 2

[2]ACCC, ACCC rejects Telstra's undertakings for fixed interconnection and local call resale services: Sets indicative prices, 29 November 2006, http://www.accc.gov.au/content/index.phtml/itemId/772020

[3]ACCC, ACCC welcomes Australian Competition Tribunal decision that Telstra's Unconditioned Local Loop Service prices are unreasonable, 17 May 2007, http://www.accc.gov.au/content/index.phtml/itemId/787667

[4]Telstra annual results FY 2005/2006

[5]Paul Budde, Submission for the Senate Environment, Communications, Information Technology and the Arts

Committee, Telstra (Transition to Full Private Ownership) BILL 2003, http://www.aph.gov.au/Senate/committee/ecita_ctte/completed_inquiries/2002-04/telstra_t3_2003/submissions/sub29.doc

[6]TelstraClear Submission to the New Zealand Competition Commission May 26, 2005.