Submission to the ACCC on Telstra’s price control arrangements

by David Richardson

Senator Stephen Conroy, the Minister for Broadband, Communications and the Digital Economy, has asked the Australian Competition and Consumer Commission (ACCC) to review Telstra Corporation Limited’s (Telstra) price control arrangements and has called for public submissions. The ACCC is to report by 12 March 2010 and the ACCC has asked for written submissions by 12 February 2010. This submission responds to the Minister’s call and its principal rationale is to put a view based on the perspective that Telstra is an extremely profitable organisation, whose profits derive from its exploitation of monopoly power. These profit results are reviewed in the next section and what they mean in principle for regulating Telstra’s prices is discussed. The following section examines the implications for consumers, especially for consumers on different income levels. In a subsequent section, responses are given to some of the questions to which the ACCC is seeking answers in its reviews. This submission then concludes with observations on Telstra and the telecommunications market.

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