Monday, August 23, 2004
Telstra sick of restrictive price caps
Telstra believes it's time for restrictive price caps imposed on its services in 1989 to be scrapped.
But before you laugh yourself to death, note the fine print on this one. In a typical piece of Labor government short-sightedness (boomer-bounty HECS was introduced in the same year) and post-1996 Lieberal inertia, the restrictive price capping of Telstra was done as a bundled arrangement. Line rentals – then and now, not subject to any competition – were allowed to increase annually by telephone number percentages, as long as call costs (assuming you could afford to make any) were proportionately reduced, so that the whole shebang was within coo-ee of the CPI increase. Meanwhile, the market for call costs has become highly competitive anyway since 1989.
Geddit? Telstra is actually objecting to a subsidy, under which over the years it has gouged billions from yours and mine pockets. This would be funny, of course, except for the fact that Telstra presumably want the current arrangements to be replaced with an even sweeter subsidy for it.
Telstra believes it's time for restrictive price caps imposed on its services in 1989 to be scrapped.
But before you laugh yourself to death, note the fine print on this one. In a typical piece of Labor government short-sightedness (boomer-bounty HECS was introduced in the same year) and post-1996 Lieberal inertia, the restrictive price capping of Telstra was done as a bundled arrangement. Line rentals – then and now, not subject to any competition – were allowed to increase annually by telephone number percentages, as long as call costs (assuming you could afford to make any) were proportionately reduced, so that the whole shebang was within coo-ee of the CPI increase. Meanwhile, the market for call costs has become highly competitive anyway since 1989.
Geddit? Telstra is actually objecting to a subsidy, under which over the years it has gouged billions from yours and mine pockets. This would be funny, of course, except for the fact that Telstra presumably want the current arrangements to be replaced with an even sweeter subsidy for it.
