ACCC Abandons Consumers, Competitors and Its Own Principles

The ACCC’s decision to walk away from its repeated assurances that it would act to reduce the prices for competitors using Telstra’s monopoly network was a grave indictment of the Commission and the regulatory framework, the CCC said today.

Consumers will likely suffer both increases in retail prices and a further loss of competitive choices as a result of the Commission’s failure of courage, CCC executive director David Forman said.

The Commission had consistently said it would abandon its discredited method of calculating the price competitors should pay for using Telstra’s monopoly network, but today instead backed away from publishing new price guidance for another year.

“The ACCC has one over-riding responsibility – to regulate the telecommunications industry in the long term interest of end users,” CCC executive director David Forman said.

“It has in the past two years repeatedly said that it believes Telstra’s prices for basic wholesale services are too high and that it – the Commission – has contributed to this by not basing its wholesale price guidance on what it costs Telstra to provide the services.

“Separately, the Commission in April published analysis that found that the concentration of power in Telstra’s hands in the retail markets for basic voice services was so great that it was two and a half times above the threshold that raised competition concerns.

“Furthermore, the Commission found that the concentration was getting worse, not better,” Mr Forman said.

“This concentration flows through directly to consumers in the form of higher prices. The OECD continues to find that Australians are paying some of the highest prices in the world for basic voice services.

“In the environment of uncertainty facing the industry surrounding the impending NBN rollout, the industry desperately needs a regulator that acts consistently and with the health of competition at the forefront of its mind.

“Yet instead of this the ACCC today announced a ‘do nothing’ approach for another year.

“The Commission’s inaction today is nothing less than an abrogation of its basic responsibilities to consumers and competitors,” Mr Forman said.

“It should be ashamed.”

Contact:
David Forman
Executive Director
CCC Inc
0438121114