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Telstra order could cut internet bills

Oct 09, 2015

Telstra has been ordered to cut the price it charges other telcos to access its copper wire network, raising the prospect of lower phone and internet bills for consumers.

The Australian Competition and Consumer Commission says Telstra should cut the price by 9.4 per cent from November 1 as the network’s gradual replacement by the national broadband network reduces the number of Australians reliant on it.

The ACCC explicitly dismissed Telstra’s argument that the migration to the NBN meant it had to charge the remaining customers more to maintain the same level of service on its fixed line network.

“Users of Telstra’s network should not pay the higher costs that result from fewer customers as NBN migration occurs,” ACCC chairman Rod Sims said.

“If there is no adjustment for these higher costs, then customers who have not yet been migrated to the NBN will ultimately pay significantly higher prices.”

The ACCC said customers were not to blame for the shift away from the copper network.

“The ACCC has taken this approach because it considers that users of the fixed line network have not caused the asset redundancy and under-utilisation,” Sims said.

The ruling is a slight modification on the ACCC’s interim ruling in June of 9.6 per cent but still represents a significant cut.

Sims said there were downward pressures on prices from factors including lower expenditures, falling cost of capital and the migration to the NBN.

“These more than offset upward pressures from a shrinking fixed line market,” Sims said.

The 9.4 per cent price cut will be in force until June 2019.

The ACCC’s final decision also covers connection and disconnection charges.

– AAP

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