Efficient use of and investment in infrastructure In determining the extent to terms and conditions are likely to encourage the economically efficient use of and investment in infrastructure, the ACCC must have regard to: whether it is, or is likely to become, technically feasible for the services to be supplied and charged for, having regard to: the technology that is in use, available or likely to become available whether the costs involved in supplying and charging for, the services are reasonable or likely to become reasonable, and the effects or likely effects that supplying and charging for the services have on the operation or performance of telecommunications networks the legitimate commercial interests of the supplier or suppliers of the services, including the ability of the supplier or suppliers to exploit economies of scale and scope incentives for investment in the infrastructure by which services are supplied; and any other infrastructure (for example, the NBN) by which services are, or are likely to become, capable of being supplied, and the risks involved in making the investment. The objective of encouraging the efficient use of and economically efficient ‘economically investment in ... infrastructure’ requires an understanding of the concept of economic efficiency. Economic efficiency consists of three components: productive efficiency this is achieved where individual firms produce the goods and services – that they offer at least cost allocative efficiency this is achieved where the prices of resources reflect their underlying – costs so that resources are then allocated to their highest valued uses (i.e., those that provide the greatest benefit relative to costs), and dynamic efficiency this reflects the need for industries to make timely changes to technology – and products in response to changes in consumer tastes and in productive opportunities. On the issue of efficient investment, the Tribunal has stated that: An access charge should be one that just allows an access provider to recover the costs of efficient investment in the infrastructure necessary to provide the declared service. investment by both access providers and access seekers would be expected to be …efficient encouraged in circumstances where access charges were set to ensure recovery of the efficient costs of investment (inclusive of a normal return on investment) by the access provider in the infrastructure necessary to provide the declared service. charges can create an incentive for access providers to seek productive and dynamic …access efficiencies if access charges are set having regard to the efficient costs of providing access to a declared service. Paragraph 152BCA(1)(b) The second matter requires the ACCC to consider legitimate business interests’ of the ‘the carrier or CSP when making an FAD.
Efficient use of and investment in infrastructure In determining the extent to terms and conditions are likely to encourage the economically efficient use of and investment in infrastructure, the ACCC must have regard to: whether it is, or is likely to become, technically feasible for the services to be supplied and charged for, having regard to: the technology that is in use, available or likely to become available whether the costs involved in supplying and charging for, the services are reasonable or likely to become reasonable, and the effects or likely effects that supplying and charging for the services have on the operation or performance of telecommunications networks the legitimate commercial interests of the supplier or suppliers of the services, including the ability of the supplier or suppliers to exploit economies of scale and scope incentives for investment in the infrastructure by which services are supplied; and any other infrastructure (for example, the NBN) by which services are, or are likely to become, capable of being supplied, and the risks involved in making the investment. The objective of encouraging the ‘economically efficient use of and economically efficient investment in ... infrastructure’ requires an understanding of the concept of economic efficiency. Economic efficiency consists of three components: productive efficiency – this is achieved where individual firms produce the goods and services that they offer at least cost allocative efficiency – this is achieved where the prices of resources reflect their underlying costs so that resources are then allocated to their highest valued uses (i.e., those that provide the greatest benefit relative to costs), and dynamic efficiency – this reflects the need for industries to make timely changes to technology and products in response to changes in consumer tastes and in productive opportunities. On the issue of efficient investment, the Tribunal has stated that: An access charge should be one that just allows an access provider to recover the costs of efficient investment in the infrastructure necessary to provide the declared service. …efficient investment by both access providers and access seekers would be expected to be encouraged in circumstances where access charges were set to ensure recovery of the efficient costs of investment (inclusive of a normal return on investment) by the access provider in the infrastructure necessary to provide the declared service. …access charges can create an incentive for access providers to seek productive and dynamic efficiencies if access charges are set having regard to the efficient costs of providing access to a declared service. Paragraph 152BCA(1)(b) The second matter requires the ACCC to consider ‘the legitimate business interests’ of the carrier or CSP when making an FAD.
MTAS%20FAD%20final%20decision%20on%20primary%20price%20terms.docx