Disputes add a premium to call costs

Enterprises have paid a 25 per cent premium for phone calls over the past 12 months because of ongoing disputes with the Australian Competition and Consumer Commission (ACCC).

Allan Horsley, managing director of the Australian Telecommunications User Group (Atug), said the ACCC's "cautious" approach to handing down decisions, such as the recent ruling on local number portability, had resulted in delays in the order of a year, subsequently delaying price cuts to call prices.

The local number portability decision stated each telecommunications carrier should bear its own costs when it loses customers.

The ACCC's telecommunications commissioner, Michael Cosgrove, denied its lengthy decision period had delayed cost savings being passed on to consumers.

"This [local number portability] decision will not, by itself, bring reduced costs to customers," he said.

Those cost savings would come about as an aggregate result of the deregulated telecommunications industry.

However, Horsley maintains the ACCC's decision process could be shorter.

"The process is far too long," Horsley said. "Because it's too long, the benefits of technology and the undertaking of cost reduction have not been passed on to end users as soon as they should have been.

"The ACCC has taken a very cautious path to develop its position to ensure it would withstand a challenge in the Federal Court," Horsley said.

Horsley accused Telstra, and to a lesser degree, Optus, of "regulatory gaming", creating delays in the deregulation of the telecommunications industry. "Regulatory gaming creates delay, it's a weapon of the incumbent and that's Telstra and Optus," Horsley said.

Part of the incumbents' concern, Horsley said, was they would loose market share to upstart telcos such as Macquarie Corporate Telecommunications and AAPT. However, he said local telcos stood to grow most out of taking business from other sectors of the economy, rather than from their competitors.

For instance, $500 million worth of calls a year was generated when the banking industry pushed its customers towards self-service through phone and Internet banking, Horsley said.

Meanwhile, the ACCC formally rejected Telstra's undertaking on interconnection charges for long-distance and international calls, proposing the carrier should cut its prices by half.

Announced last week, the decision follows a draft decision in January this year to reject the undertaking based on unreasonable non-price terms and conditions.

Interconnection allows competing carriers access to Telstra's network for international and long-distance calls.

According to officials, the ACCC's assessment of the undertaking is based on the costs that an "efficient" operator incurs when providing these services.

It also includes cost reductions over time driven by lower labour costs as well as increases in traffic volume.

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More about AAPTATUGAustralian Competition and Consumer CommissionAustralian Competition and Consumer CommissionHorsleyMacquarie Corporate TelecommunicationsOptusTelecommunications User GroupTelstra Corporation

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