7930410_2.DOC PUBLIC VERSION OF TELSTRA’S SUBMISSION IN RESPONSE TO THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION’S DISCUSSION PAPER IN RESPECT OF SSS DATED MARCH 2005 INDEX A INTRODUCTION page 2 B CONFIDENTIALITY page 2 C BACKGROUND page 3 D MONTHLY ACCESS CHARGE page 3 D1 Cost modelling issues in relation to SSS-specific costs page 3 D1.1 Asset life page 3 D1.2 Demand forecasts page 5 D1.3 Other SSS Specific Costs modelling issues page 6 D2 Line Related Costs page 9 D3 Questions raised by Commission page 10 D3.1 The reasonableness criteria page 10 D3.2 Pricing page 11 D3.3 ULLS page 11 E CONNECTION AN DISCONNECTION CHARGES page 12 E1 The cost of labour page 12 E1.1 Overhead costs page 12 E1.2 Disconnection costs page 14 E1.3 The conversion from total costs to hourly costs page 14 E2 Multiple versus individual service connections page 14 E3 Questions raised by Commission page 15 E3.1 Reasonableness criteria page 15 E3.2 Competitive Neutrality page 15 E3.3 Pricing page 15 F NON-PRICE TERMS AND CONDITIONS page 16 G CONCLUSION page 17
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7930410_2.DOC
PUBLIC VERSION OF TELSTRA’S SUBMISSION IN RESPONSE TO THE AUSTRALIAN COMPETITION AND
CONSUMER COMMISSION’S DISCUSSION PAPER IN RESPECT OF SSS DATED MARCH 2005
INDEX
A INTRODUCTION page 2
B CONFIDENTIALITY page 2
C BACKGROUND page 3
D MONTHLY ACCESS CHARGE page 3
D1 Cost modelling issues in relation to SSS-specific costs page 3
D1.1 Asset life page 3
D1.2 Demand forecasts page 5
D1.3 Other SSS Specific Costs modelling issues page 6
D2 Line Related Costs page 9
D3 Questions raised by Commission page 10
D3.1 The reasonableness criteria page 10
D3.2 Pricing page 11
D3.3 ULLS page 11
E CONNECTION AN DISCONNECTION CHARGES page 12
E1 The cost of labour page 12
E1.1 Overhead costs page 12
E1.2 Disconnection costs page 14
E1.3 The conversion from total costs to hourly costs page 14
E2 Multiple versus individual service connections page 14
E3 Questions raised by Commission page 15
E3.1 Reasonableness criteria page 15
E3.2 Competitive Neutrality page 15
E3.3 Pricing page 15
F NON-PRICE TERMS AND CONDITIONS page 16
G CONCLUSION page 17
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A INTRODUCTION
1 On 13 December 2004, Telstra gave to the Australian Competition and Consumer
Commission (“the Commission”) two undertakings pursuant to section 152BS of the
Trade Practices Act 1974 (“the Act”) in respect of the High Frequency Unconditioned
Local Loop Service (otherwise known as Spectrum Sharing Service) (“SSS”) namely:
(a) one dealing with the monthly charges; and
(b) second one dealing with the connection and disconnection charges;
that are to apply when Telstra provides SSS in 2004/05 and 2005/06 (collectively the
“Undertakings”).
2 On 7 March 2005 Telstra provided to the Commission submissions in support of the
Undertakings as follows:
(a) Submission in Support of the SSS Monthly Charges Undertaking (“SSS Monthly
Submission”); and
(b) Submission in Support of the SSS Connection and Disconnection Charges
(a) calculates the annualised (using a tilted annuity) capital costs for each year over
the 5 year average lifetime of the relevant assets;
(b) calculates a levelised price over a 4 year period that fully recovers the annualised
costs falling within, and before, this 4 year period. A 4 year period is used as this
represents the time from when SSS was first provided to the end of the term of the
Undertaking. This is done by calculating the present value of the annualised
capital costs (and other costs) over the period from when SSS was first provided
by Telstra (with costs incurred in earlier years brought forward into this period)
until the end of the term of the Undertaking3. The present value of these costs is
then levelised using the present value of actual and forecast demand over the same
period to find a unit cost per SSS that allows Telstra to just recover its costs, if the
demand forecasts are realised. Given that the levelised price is set to recover
efficiently incurred costs and no more, it is Telstra’s view that the Commission’s
characterisation of this as “less than compelling” is unwarranted. Levelisation
avoids access seekers from having to pay relatively high prices for SSS in the
early years, when the average cost is relatively high due to low levels of demand,
and low prices in later years, when the average cost is relatively low due to higher
levels of demand.
10 This is consistent with the method of cost recovery used in the ULLS monthly cost model
in that:
(a) both the ULLS and SSS specific cost recovery periods end at 2005/06, the end
date of the Undertakings; and
(b) the cost recovery periods have different lengths because the provision of ULLS
and SSS began at different dates.
In that regard, Telstra relies on the report of Henry Ergas entitled “Confidential Expert
Report on ULLS and SSS Specific Cost Models - Levelisation” (“the Levelisation
report”).
3 The justification for using this period, and bringing costs forward from earlier periods, is outlined in the report of Henry Ergas entitled “Confidential Expert Report on ULLS and SSS Specific Cost Models - Levelisation” (“Levelisation report”).
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D1.2 Demand forecasts
11 The Commission seeks views as to what method should be utilised for forecasting SSS
demand4. Telstra relies on the Statement of Ashwini Pradhan dated 26 May 2005 (“the
Pradhan statement”) as to the methodology used to forecast SSS demand for 2004/05
and 2005/06. Telstra submits that this methodology and the resultant Telstra forecasts are
reasonable.
12 The Commission states that, in the past, Telstra (and the Commission) was unduly
conservative in forecasting SSS demand and therefore Telstra’s demand forecasts are
more likely than not to be pessimistic and may need to be revised upwards5. Telstra
responds as follows:
(a) the forecasts to which the Commission refers were estimated by Telstra in mid
2003;
(b) SSS was declared on 30 August 2002. Consequently, at the time Telstra prepared
the 2003 forecasts, it had experienced less than a year of take-up of SSS on which
to base its forecast;
(c) in the period from 30 August 2002 to 30 June 2003 there were only “c-i-c” SSS
acquired. All but one of those services were taken up in June 2003, that is, in the
last month of the first period of that service;
(d) in short, Telstra had very little information upon which it could base its 2003/04
forecasts;
(e) to state, as the Commission does, that as a consequence Telstra’s current forecasts
are “more likely than not to be pessimistic and may need to be revised upwards” is
disingenuous;
(f) in contrast, Telstra now has significantly more comprehensive information on
which to base its forecasts;
(g) as at 30 April 2005 the take-up of SSS was “c-i-c”;
ULLS Monthly Submission. In any event, it would be irrational for ULLS access seekers
to target other than the most profitable customers. In that regard, there is currently
virtually no take-up of ULLS in Bands 3 and 4.
7 Fourth , the Commission asserts that the USC is aimed at recovering costs of net loss
making customers34. This is not the case and Telstra relies on the statement of Geoffrey
David Sims dated 26 May 2005 (“Sims Statement”) in that regard. In summary, the
USO cost-sharing regime is focused on recovering the avoidable costs associated with
delivery of the USO and is not aimed at recovering the full cost of delivering service in
USO areas. Moreover, it only requires other industry participants to contribute to the
costs of serving high cost customers when Telstra makes a loss and hence does not
achieve competitive neutrality. In any event, the number of customers in USO areas is
around 500,000, whereas there are in excess of “c-i-c” customers in Band 4 alone.
8 Fifth, the Commission notes that it is not clear that there is effective competition for
services in rural and provincial areas and, in the absence of competition, it is possible that
Telstra is able to price above cost in at least some, if not, all of these areas35. Again, the
Commission is incorrect to suggest that Telstra can price above cost in rural and
provincial areas. Telstra faces national price caps that prevent it from increasing prices by
more than set thresholds. Furthermore, Telstra competes, at the retail level, with access
seekers who acquire wholesale services from Telstra, many of which are regulated such
that Telstra supplies those wholesale services at or below cost. Therefore, to the extent
that access seekers are as efficient as Telstra, Telstra is unable to price retail services in
regional and rural areas at above cost.
9 Sixth, the Commission considers that there is significant potential for Telstra to be able to
recover the access deficit from non-regulated products that also use the CAN, such as
ADSL36. Telstra’s DSL customers already contribute toward the access deficit through
local, STD, IDD, F2M or PSTN OTA prices. This is the reason why access seekers who
supply ULLS-based voice and DSL services should also contribute toward the access
deficit. Otherwise those ULLS-based access seekers will have a competitive advantage
relative to Telstra and be able to take the market in spite of being less efficient than
Telstra. In any event, the market for broadband services (which relies on ADSL) is
extremely competitive. This is evidenced by the competitive price offerings available
33 Ibid34 Ibid35 Discussion Paper, pages 23 and 24
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from Telstra’s competitors, the number of competitors in that market and by the
alternatives to Telstra’s network such as Hybrid Fibre Coaxial (“HFC”) Cable and optical
fibre (eg Optus, Transact and Neighborhood Cable) and wireless solutions (eg Unwired,
Personal Broadband, BigAir and Iburst). Therefore it is incorrect to suggest that Telstra
could recover the ADC from ADSL prices.
10 Seventh, the Commission asserts that as PSTN prices are based on an estimate of total call
volumes over the PSTN, PSTN prices will, overtime, adjust to account for the movement
of customers away from the PSTN37. Telstra assumes that the Commission intends this to
refer to ‘PSTN OTA prices’ and not ‘PSTN prices’ as not all PSTN prices are based on an
estimate of total call volumes. If so, then the Commission’s reasoning is incorrect.
Telstra will not be able to increase the ADC component of its PSTN OTA prices, to
account for the movement of customers away from the PSTN while the Commission
remains committed to removing such a contribution, particularly if access seekers target
high volume or low cost customers. In that regard, Telstra refers to paragraphs 45 to 52
of its ULLS Monthly Submission.
11 Eighth, the Commission notes that it is not clear that all ULLS lines provide voice calls
and to the extent that they do not, Telstra’s ADC charge would constitute double
dipping38. ULLS is a multi service access technology which allows access seekers to offer
both telephony and high speed data to a customer. Therefore it is reasonable to assume
that customers will use ULLS for voice telephony.
12 Ninth, the Commission considers that it is not clear that all ULLS lines lead to a loss of a
line to Telstra39. It does in the vast majority of cases. Approximately “c-i-c” of the
forecast ULLS demand will be constituted by mass network migrations. As those
migrations relate largely to residential customers, it would lead to the loss by Telstra of
either a retail or wholesale basic access service or line. As to the remainder of the
demand, Telstra either has lost or will loose (in respect of new ULLS services taken up)
either a wholesale or retail basic access service or line because the line used for ULLS
will no longer be supplied by Telstra. The only instance when this would not be the case
is when ULLS is sought in respect of a line on which ULLS is already provided. The
Commission’s reference to a “vacant” pair being provided for ULLS by Telstra is
misconceived. It may be that Telstra, for ease of provisioning of ULLS, provides a vacant
36 Discussion Paper, page 2437 Ibid38 Ibid
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pair for the purposes of ULLS. But, in order to provide ULLS Telstra disconnects the
Telstra in use pair. In that regard, Telstra relies on the statement of Natalie Monique
Luscombe dated 25 May 2005 (“the Luscombe statement”).
13 Tenth, the Commission considers that Telstra’s competitive neutrality argument to justify
an ADC appears fundamentally flawed in conceptual terms as there is significant evidence
to suggest that an ADC cannot be considered competitively neutral40. Telstra relies on the
ADC Report, which sets out why imposition of an ADC is competitively neutral. In
summary, the significant evidence referred to by the Commission, being the Gans and
King paper, is an extension of a short run concept of competitive neutrality developed by
Tye. Its short-run focus makes it inappropriate for assessing the long-term interests of
end-users. Instead, the Commission should have regard to Tye’s concept of strong
competitive neutrality, which requires that equally efficient firms have the same
opportunity to recover their total costs. Preventing Telstra from recovering an access
deficit as part of ULLS prices is inconsistent with strong competitive neutrality, since an
equally efficient ULLS-based access seeker would not need to recover an ADC from its
customers, yet Telstra would.
C.4 IEN costs (section 4.4)
The Commission has invited comment on the IEN costs which Telstra seeks to recover as
part of the price of ULLS. In that regard, Telstra relies on the Report of Henry Ergas
entitled “Confidential Expert Report on ULLS and SSS Prices - IEN Costs” (“the IEN
Report”).
C4.1 Contribution to common costs
14 The Commission questions what Telstra means by “common costs” in this context. The
common IEN costs to which Telstra refers are those IEN costs which are incurred when
any one IEN service, or combination of several IEN services, is supplied. Hence these are
the IEN costs that do not change when customers switch to ULLS-based access seekers.
15 In making the statement that “Telstra has to incur common costs whether or not it
provides the IEN and, therefore, regardless of whether it is the COLR”41, the Commission
has misunderstood Telstra’s position. The common costs to which Telstra is referring are
the common costs of the IEN, not Telstra’s common costs more broadly. These IEN
39 Ibid40 Ibid41 Discussion Paper, page 25
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common costs are only incurred if Telstra provides an IEN service and are not incurred
otherwise.
16 Notwithstanding the above misunderstanding of the nature the common costs to which
Telstra is referring, the Commission considers that Telstra’s argument must be interpreted
as stating that when access seekers make use of ULLS, Telstra will no longer be able to
spread its common costs over as many PSTN minutes and should be entitled to recover
those costs from the access seeker42. This is correct.
17 The Commission goes on to state that this argument relies on the assertion that customers
making use of the ULLS still benefit from the IEN common costs that are incurred by
Telstra43. This is also correct. Such customers can return to Telstra at any time, and
Telstra is required to provide them with a standard telephone service (“STS”). However
the Commission considers that the argument does not hold because Telstra would have to
incur the costs regardless of whether the end user has the benefit of switching to Telstra44.
On the Commission’s reasoning, however, all STS customers should make no
contribution toward IEN common costs. In short, under the Commission’s reasoning
common costs would never be recovered. Contrary to the Commission’s view, it is
completely standard in economic theory for all parties that share a common cost to
contribute toward its recovery, not least because cost recovery from all service users is
more efficient than recovery from a narrower base of users. In the present case, ULLS
comes with COLR insurance, which jointly shares the IEN common costs with Telstra’s
STS customers. However, without a contribution to common costs in the ULLS price,
Telstra loses its ability to recover the IEN common costs from ULLS end-customers and
since those customers do not need to contribute to those common costs, its ability to
recover it from Telstra’s STS customers for whom it competes with ULLS based
providers.
18 The Commission takes issue with Telstra’s claim in its supporting submission that it may
be inefficient for the customer to shift to ULLS-based service in the absence of a
contribution to the IEN common costs because ‘…the social costs (which are the sum of
the costs necessarily borne by Telstra and access seekers) would be higher as a
consequence.’ The Commission states that if this is true, it would imply that the IEN is a
42 Ibid43 Discussion Paper, page 2644 Ibid
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natural monopoly because it would not be possible for the service to be provided more
cheaply by two providers and that Telstra has presented no evidence to this effect45.
19 The point being made by Telstra does not rely on the IEN being a natural monopoly.
Rather, Telstra’s argument is that not requiring ULLS customers to make a contribution to
the recovery of common IEN costs could lead to inefficient investment in ULLS and
downstream services whereby service would not be provided at the lowest resource cost
to society. If ULLS prices do not include a contribution toward the IEN common costs
(which, as previously explained, is standard in economics), then the prices of ULLS-based
retail services will not reflect these costs. Rather ULLS access seekers will obtain the
COLR insurance for free. Even if Telstra does not adjust the prices that lead its STS users
to contribute more towards IEN common costs, this will allow access seekers to profitably
provide their services at a quality adjusted price below Telstra’s retail prices for the same
service46. Demand for ULLS-based retail services relative to demand for Telstra’s STS
will be greater than is efficient, leading ULLS-suppliers to over invest and over supply
their services. Worse, in these circumstances, if Telstra is to recover its IEN common
costs, it must increase the prices that allow cost-recovery from its own STS, and this
would further accentuate the inefficient shift in demand toward ULLS-based service47.
20 The Commission also rejects Telstra’s argument that access seekers should contribute to
Telstra’s IEN common costs on the basis that it could mean that the access seekers would
have to contribute to their own as well as Telstra’s common costs48. This is indeed
correct, and appropriate from an economic efficiency perspective. That is, as Telstra
incurs some costs that would not be diminished if some (or even all) PSTN services
switched to ULLS provision, the price access seekers need to face to give an efficient
outcome (i.e. service provision at the lowest resource cost to society) needs to reflect this
cost which Telstra incurs.
45 Ibid46 Such lower prices will necessarily eventuate if the Commission’s purpose in making ULLS available (which is to increase retail competition bringing prices more in line with costs, and spurring innovation) is sound.47 Over time such a price increase would become unsustainable (see footnote 46), and Telstra would be forced to price at the market level (see footnote 54). Market prices would, however, continue to be below costs, and output and investment by Telstra’s rivals inefficiently high. At the same time, while Telstra could have inefficiently high levels of output, its investment incentives would be inefficiently weak, since it is not allowed to recover the full costs of the investments necessary to supply an IEN when it faces a COLR obligation.48 Discussion Paper, page 26
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21 Oddly, the Commission indicates that requiring a contribution from access seekers would
mean that Telstra would be able to force access seekers out of the market49. In fact,
without a COLR contribution, Telstra is subsidising its rivals. In a competitive market
that ULLS is intended to create, if Telstra provides COLR insurance for all customers,
and access seekers do not have to pay for this, then the market price (including Telstra’s
price) would reflect the costs of the ULLS service as if COLR insurance was costless. Of
course, the COLR insurance is not costless, and Telstra would fail to fully recover the
costs of its IEN. Telstra would be forced operate at a loss while subsidising its rivals50.
Moreover, Telstra is not asking that it be allowed to charge ULLS access seekers an
arbitrarily large contribution toward its IEN common costs, but rather one that essentially
recovers IEN costs on a per line basis.
22 In summary, Telstra considers that the long term interests of end users and the efficient
investment are best met if Telstra recovers common IEN costs over a wide tax base,
including the ULLS. To do otherwise would mean that Telstra would have to bear these
costs which would lead to a range of inefficiencies.
C4.2 Recovery of traffic sensitive costs
23 Telstra seeks to recover from ULLS access seekers a contribution to the common costs of
the IEN and the IEN COLR costs that are attributable to ULLS. To estimate these costs
Telstra has measured the long run incremental costs of supplying all IEN services (which
the Commission sometimes calls TSLRIC+) at the wholesale level using the PIE II model.
24 When discussing Telstra’s need to provision its network with spare capacity to supply
future demand, regardless of any COLR obligation, the Commission states that “in
modeling network costs, this additional capacity should already be taken into account.”
Telstra agrees with the Commission on the need to provision the network for future
demand, but notes that the Commission (inconsistently) does not allow Telstra to
provision any spare capacity in the PIE II model for future demand. However, merely
because Telstra must supply excess capacity for its own STS customers in no way means
that Telstra has supplied sufficient spare capacity to meet its COLR obligations, given the
presence of end-users with ULLS-based services. The COLR obligation is additional to
Telstra’s supply of STS, and requires additional capacity if Telstra is to be able to supply
49 Ibid50 The alternative of exit on Telstra’s part would likely be more costly, as it still would incur the IEN costs necessary to meet its COLR obligation, but gain no revenues at all from STS customers.
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a customer that decides to switch to Telstra from a ULLS-based access seeker. These
costs should be recovered from ULLS access seekers since it is the end users who acquire
ULLS-based services who benefit from being able to switch back to Telstra.
25 The Commission suggests that when customers switch to Telstra as a result of an access
seeker ceasing to operate because of financial difficulty, it may be possible to meet the
needs of these customers in other ways. For example, through Telstra leasing the (failed)
access seeker’s facilities in order to continue to meet its service guarantees51. There are
many reasons why Telstra could not plan to lease a failed access seekers’ network to
comply with the COLR. These are outlined in the statement of Barlennan Straede dated
25 May 2005 (“the Straede Statement”). In summary, Telstra’s COLR obligations
require it to supply customers with STS within strict time constraints. It is not certain that
Telstra would be able to lease a failed access seekers’ facilities within these time
constraints. Second, access seekers use a variety of different equipment types which may
work in a different way to the equipment used by Telstra, impacting on Telstra’s ability to
guarantee that the equipment performed to the requisite standard. Third, the network
management and billing systems used by the access seeker will be different to that used
by Telstra. This would result in a lot of work for Telstra, including training staff to use
the access seeker’s system or taking over the access seeker’s staff. There is no guarantee
that this could be achieved within the required time frames. Finally, the access seeker
may have failed because its network does not provide adequate service, in which case
Telstra could not use it to comply with its COLR obligation.
26 According to the Commission, the key question seems to be whether Telstra will be able
to reduce the size of its IEN when access seekers take up ULLS. Telstra submits that it
cannot reduce the size of its IEN due to its COLR obligations. If those obligations did not
exist, Telstra would reduce the traffic sensitive costs of the IEN. In any case, Telstra’s
cost estimates are forward-looking, and are based on forecasts of Telstra STS demand and
ULLS demand. They are in no way predicated on Telstra’s existing network. Indeed, the
actual size of Telstra’s existing network is irrelevant to a regulatory regime based on
forward-looking efficient long run (incremental) costs. Moreover, if the Commission
considers history to matter, and if it were the case that Telstra’s existing network was
more than sufficient to meet the COLR demand, then the regulatory creation of ULLS in
51 Discussion Paper, page 27
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effect stranded investments made in good faith by Telstra, and Telstra should be
compensated for this.
C4.3 Estimation of IEN costs
27 The Commission states that Telstra provides no details of its estimation of IEN costs. The
IEN costs were obtained directly from the PIE II model, which has been supplied to the
Commission. They have been calculated as follows.
2004/05 IEN costs
28 The 2004/05 IEN costs are an output of the PIE II model. The results include the total
annualised cost of the IEN which can be accessed by using the following menus: PIE
Front End; Costing and Analysis; Detailed Cost Reports; Summary Reports; and Network
Cost Summary. A copy of the Network Cost Report is Annexure C to this submission and
shows that the total annualised costs of the IEN (being the sum of transmission and
switching costs), for 2004/05, are:
CBD Metro Provincial Rural Total
“c-i-c” “c-i-c” “c-i-c” “c-i-c” “c-i-c”
29 The total number of PSTN services in operation assumed by the PIE II model is:
CBD Metro Provincial Rural Total
“c-i-c” “c-i-c” “c-i-c” “c-i-c” “c-i-c”
30 The 2004/05 IEN costs per SIO are calculated by dividing the annualised cost of the IEN
in each area by the number of SIO’s in the area.
2005/06 IEN costs
31 To calculate the 2005/06 IEN costs, the outputs of the PIE II model for 2003/04 and
2004/05 were used. The Network Cost Report is Annexure D to this submissions and
shows that the total annualised cost of the IEN (being the sum of transmission and
switching costs), for 2003/04, are:
CBD Metro Provincial Rural Total
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“c-i-c” “c-i-c” “c-i-c” “c-i-c” “c-i-c”
32 The 2004/05 IEN costs set out in paragraph 28 above were then multiplied by the ratio of
the IEN costs for 2004/05 and 2003/04. The IEN costs for 2005/06 are:
CBD Metro Provincial Rural Total
“c-i-c” “c-i-c” “c-i-c” “c-i-c” “c-i-c”
33 These costs were then divided by the number of SIOs set out in paragraph 29 above.
34 The Commission asserts that Telstra’s approach to the calculation of IEN costs would
only be appropriate if Telstra could not reduce the size of its network at all which is not
likely as not all ULLS consumers will return to Telstra’s IEN52. Telstra considers that the
full costs of the COLR exist where there is any likelihood of customers returning to
Telstra’s IEN because to do otherwise would risk Telstra not meeting its COLR
obligations.
35 In any event, Telstra considers that the IEN costs estimated by it are reasonable for the
reasons set out in the IEN Report. In summary the IEN Report indicates that Telstra has,
at most, over-estimated the IEN cost contribution to be paid by ULLS access seekers by
“c-i-c” per cent, and likely by less than this. This estimate does not take into account
economies of scale and that ULLS access seekers tend to target high volume customers
which would serve to reduce this figure. This margin of error is well within the
Commission’s forecast errors with respect to the take-up of ULLS.
36 The Commission further considers that the IEN argument as outlined by Telstra appears
to only apply to ULLS which are used to provide voice calls, and where that voice call is
carried on a network entirely separate to Telstra’s IEN. The Commission states that it
does not know to what extent this characterises the current and future use of ULLS53.
Telstra expects that the majority of ULLS will provide voice services.
52 Discussion Paper, page 2853 Ibid
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ANNEXURE C TO THE PUBLIC VERSION OF TELSTRA’S SUBMISSION IN RESPONSE TO THE AUSTRALIAN COMPETITION
AND CONSUMER COMMISSION’S DISCUSSION PAPER IN RESPECT OF ULLS RECEIVED MARCH 2005
Network Cost Report which shows the total annualisedcosts of the IEN for 2004/05
PSTN Ingress / Egress model2004/05 Base Case
Total Costs by Network
CBD Metro Prov Rural Total
TransmissionTNS to TNS $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c”
LAS to TNS $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c”
LAS to LAS $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c”
RAU to LAS $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c” $“c-i-c”