Telstra has lost its bid to overturn a ruling that slashed what it could charge competitors using its copper network, dealing a possible $80 million a year blow to the telco giant.
The Federal Court has dismissed an appeal by Telstra against a 2015 ruling by the Australian Competition and Consumer Commission that ordered it to reduce access prices to its fixed line network by 9.4 per cent.
In a comprehensive ruling, the court dismissed all avenues of Telstra's appeal and ordered it to pay the ACCC's costs, saying the grounds for the appeal rose no higher than "impermissible" requests for review and "attacks" on the regulator's methodology.
The 2015 ACCC decision ordered Telstra to cut prices for access to its copper network to ensure telco customers did not incur higher costs as users migrated to the National Broadband Network.
Telstra chief executive Andy Penn said in 2015 the ACCC decision threatened the company's ability to recover costs of infrastructure investment and the ongoing costs of maintaining the copper network.
He said then that the short-term impact in 2015/16 would be a hit to profitability of up to $80 million.
Central to the case was whether the ACCC was able to ignore a 2011 agreement between Telstra, NBN Co and the federal government, struck in 2011, to provide $11 billion in payments to replace revenues lost in the NBN transition.
The ACCC took the position that Telstra had other avenues to recover losses as customers moved off the copper network and ACCC chairman Rod Sims said the court's dismissal showed the regulator's approach was correct.
"The ACCC's determinations meant that the remaining users of Telstra's network shouldn't pay higher costs due to a shrinking customer base on the copper network as others migrate to the NBN," ACCC Chairman Rod Sims said.
"The ACCC considered that Telstra had an opportunity to be compensated for such costs under its migration arrangements with NBN Co, and is receiving payments for customer disconnections."
The Competitive Carriers' Coalition - an industry body for smaller telcos - welcomed the court ruling, with CCC chairman Matt Healy saying it removed a shadow from over the industry.
"Telstra was, in effect, asking for a multi-million dollar double dip," Mr Healy said.
"While the court's rejection of Telstra's claim is very welcome, this case shows again the inequity in the industry."
