PROJECTS

Expert Evidence on Fixed Line Access Determinations, Australia

The problem

Telstra’s exemption from regulations setting prices at which it must offer competitors fixed line services for them to resell (provided there was competition in supply of those services) was under threat. Telstra’s competitors were arguing that the Australian Competition and Consumer Commission (ACCC) should reinstate these requirements. Telstra—Australia’s largest telecommunications company—worried that this would damage its competitive and commercial position.

How we helped

Castalia’s Alexander Sundakov provided expert testimony showing that the exemption Telstra had been granted was sound as a matter of economic principle and did not harm either customers or competitors. These findings were supported by financial modelling showing that access prices charged by Telstra were consistent with prices expected in competitive markets and did not create monopoly rents.

Impact

Despite the evidence we supplied, the ACCC ruled that regulation should be reinstated, primarily because it considered that the rollout of a government-funded National Broadband Network was chilling competitive investment in copper fixed-line services.