Telstra retail price controls

Telstra retail prices on a range of fixed-line services are capped under the Telstra Carrier Charges—Price Control Arrangements, Notifications and Disallowance Determination No. 1 of 2005 (the Determination).

Price caps apply to 'baskets' of services, such as monthly line rental and connection fees, and generally only permit price increases in line with CPI movements. The cost of untimed local calls for residential and payphone services is set at 22 cents and 50 cents respectively. Price control arrangements of this type have applied to Telstra (or its predecessors, Telecom and the Overseas Telecommunications Corporation) since 1989.

Price controls are considered a key telecommunications consumer safeguard that aim to ensure that efficiency improvements are passed through to consumers in the form of lower prices for telecommunications services in markets where competition is not yet fully developed. They also protect the interests of low-income and regional users of telecommunications services.

External siteTelstra Carrier Charges—Price Control Arrangements, Notifications and Disallowance Determination No. 1 of 2005

Review of Retail Price Controls 2011

The Australian Government is conducting a review of retail price control arrangements for fixed-line telecommunications services. The current arrangements are due to expire on 30 June 2012.

The department released a discussion paper as part of this review in October 2011. It provides background on the current retail price controls, explores a range of issues to be considered by the review and invites submissions from interested parties on these matters. The discussion paper and the Minister's media release are available here:

Terms of reference for the review

  1. The review is to provide advice to the government on:
    1. a) the appropriate policy framework for retail price controls
    2. b) the services, if any, which should be subject to price controls
    3. c) any legislative changes required to give effect to that policy framework
    4. d) any interim arrangements which would be required during the transition to a new price control framework.
  2. In doing so, the review is to have regard to:
    1. a) the extent to which retail price controls benefit consumers
    2. b) the implications of the NBN rollout for price controls, including:
      1. (i) the government's commitment to uniform national wholesale pricing
      2. (ii) enhanced retail competition in an open-access, wholesale-only network environment
      3. (iii) the migration of fixed-line services from existing networks
    3. c) whether the implementation of any price controls should be subject to different arrangements for services supplied using the NBN or Telstra's copper network
    4. d) whether price controls should apply to service providers other than Telstra
    5. e) whether there are cost-effective alternatives to the use of the current price control arrangements for assisting low-income users
    6. f) what arrangements should apply to the provision of untimed local calls in Extended Zones
    7. g) what arrangements for regulatory oversight should apply.

Responces to discussion paper

The department received 10 submissions in response to the discussion paper. Public versions of these submissions are available here.

Enquiries

For enquiries, please email pricecontrols@dbcde.gov.au or telephone Mr Chris Purnell, Acting Manager, Competition Policy, Networks Regulation Branch on
02 6271 1735.

Extension of price controls to 2012

In June 2010, following public consultation the Minister extended the existing price control arrangements until June 2012.

The Instrument and accompanying Explanatory Statement are available here:

In 2010, the Australian Competition and Consumer Commission conducted a review of price control arrangements. Its report is available on the ACCC website

 
 
 
 
Document ID: 126996 | Last modified: 10 February 2012, 4:03pm