Telstra this week took the Australian Competition and Consumer Commission (ACCC) to court over the regulator’s decision to order it to reduce its wholesale copper access prices.
The incumbent operator argues that the scale efficiencies of providing legacy, copper-based broadband are being eroded by the steady migration of customers to the new national broadband network (NBN).
It is why in October 2014 Telstra asked the ACCC for permission to raise wholesale prices by 7.2% in 2015.
Needless to say, the ACCC sees it very differently, arguing that end users should not have to bear the cost of customers switching to NBN-based services. Therefore in June the watchdog proposed a 9.6% cut in Telstra’s wholesale access prices. Following a consultation period, the ACCC made a final decision to order a 9.4% cut.
In his inaugural AGM speech in October, new Telstra CEO Andrew Penn warned that the ACCC’s decision jeopardised future network investment.
"In our view, the decision does not follow the ACCC’s own fixed pricing principles that require Telstra to be given the opportunity to recover from wholesale customers the costs of providing services to them," said a Telstra spokesman in an email to Total Telecom on Thursday.
The telco said it has filed for a review with the Federal Court in a bid to overturn the ACCC’s decision.
"We believe the court is the appropriate place for us to get clarity on this matter," the spokesman said.
ACCC chairman Rod Sims said in a Sydne y Morning Herald report that he had already considered the possibility that Telstra would mount a legal challenge.
"We’re comfortable with Telstra seeking judicial review as is their right," said Sims, in the report, insisting that his price-cut order did take into account "the unique circumstances of the transition from Telstra’s copper network to the NBN."
