Mobile service provider Telstra has lost its battle against a ruling to cut the amount it can charge its customers for access to its copper network.
The Australian Competition and Consumer Commission (ACCC) ruled in 2015 that Telstra was required to reduce access prices to its fixed line network by 9.4%. The move could potentially cost the telecommunications giant $80 million per year.
Telstra fought the ruling based on concerns about their ability to recover infrastructure investment following the price cut. However, it has now been ruled that the shortfall can be recovered through other channels, such as the rapidly-growing NBN network.
ACCC chairman Rod Sims has praised the decision and reinforced that Telstra is not without options.
“The ACCC’s determinations meant that the remaining users of Telstra’s network shouldn’t pay higher costs due to a shrinking customer base on the copper network as others migrate to the NBN,” Mr Sims said. “The ACCC considered that Telstra had an opportunity to be compensated for such costs under its migration arrangements with NBN Co, and is receiving payments for customer disconnections.”
Justice Foster of the Australian Federal Court, who oversaw the appeal, found that there was no error in the initial action taken by the ACCC. Justice Foster has ordered Telstra to cover the costs incurred by the ACCC’s legal team in the course of the proceedings.
“Telstra has failed to show that the ACCC committed any reviewable error in the course which it took,” said Justice Foster. “At best, the grounds of review advanced by Telstra rise no higher than impermissible review of the merits of the ACCC’s decision and impermissible attacks on methodologies employed by the ACCC which were plainly open to it.”
Other telecommunications companies, such as Optus and TPG, who are listed as respondents in the case presented by the ACCC, are also able to claim legal expenses back from Telstra.