CompTel/Ascent Alliance supported a proposal by the Australian te...
CompTel/Ascent Alliance supported a proposal by the Australian telecom regulator to require mobile operators to gradually reduce the costs of terminating calls by half by 2007. But it said it remained concerned that “gradual decrease may inhibit competition.” The…
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Australian Competition & Consumer Commission (ACCC) issued a preliminary decision Fri., saying it planned to continue to regulate the mobile termination services. The decision came as part of a wide-ranging ACCC review of the regulation of Australian mobile telephone services launched by the regulator last March. ACCC Comr. Ed Willett said in a statement that current termination charges in Australia were “at least twice the cost of delivering the service.” The Commission said the current approach, which was introduced in July 2001 and used retail benchmarking principles to guide the industry in the wholesale pricing of that service, had “not been as effective as it was hoped” and retail prices in mobile services had “not decreased as much as was expected.” The Commission recommended the adoption of a more direct pricing principle that would require mobile operators to gradually reduce the price of the mobile termination service to 9 cents per min. by Jan. 2007. It said the new price was based on the accounting information provided by Australian mobile operators and benchmarking against cost estimates worldwide. The draft pricing principle would require the price to fall to 16 cents per min. by July 1, 2004, with 3 further reductions of 2 cents per min. on Jan. 1 in each of the 3 following years. Willett said the new approach would ensure “a closer correlation between the price and the cost of delivering the mobile termination service.” The ACCC asked for comment on the draft by April 30, saying it expected to issue its final decision in June. CompTel/Ascent Chief Legal Officer Ann Bischoff applauded the proposal, saying that was “a significant step that will eventually help cut in half some of the highest mobile termination rates in the world.” But, she said she was “concerned” that the gradual implementation of the rate reductions was “too slow” and would “cost consumers billions of dollars in unnecessary fees. We believe that an immediate move toward cost-based rates would result in a more robust, competitive marketplace in Australia that would translate into lower bills for consumers.”