THE federal Government has put off a decision on whether to change the rules on access to Telstra's copper networks by sending it back to the competition regulator, casting further uncertainty over its plans for the $25 billion sale of Telstra next year.

The Government has waited six weeks to consider Telstra's request to have a national average price for access to its raw copper wires, following an inter-departmental report.

At the heart of the issue is tension between the Government's policy of retail parity pricing for telecommunications services and four geographical bands, also known as de-averaging, for its wholesale copper access. Retail parity pricing gives metropolitan and regional users the same services at the same prices. This is one of the key issues that will determine the scope of Telstra's planned $11 billion investment in new networks.

The company suffered a blow last week when Communications Minister Helen Coonan said the Government would not enact legislation to protect a new residential fibre-optic cable networks from access by competitors.

A definite ruling against Telstra yesterday would have further cruelled its investment plans. But rather than make a decision on the copper network, the Government has asked the Australian Competition and Consumer Commission to investigate the impact of its wholesale pricing decisions. Following this, the Government said it would "determine whether any further action is required to ensure Telstra is able to fulfil its pricing parity requirements".

The Government must make a decision by early March on how much of its 51.8 per cent stake in Telstra it wants to sell later next year. Regulatory uncertainty is one of the biggest reasons global investors cite for not investing in Telstra shares.

Telstra national media manager Andrew Maiden said: "It's encouraging that the ACCC must now take into account whether its pricing decisions place an 'unreasonable burden' on industry players including Telstra.

"Telstra has long argued, and the OECD (Organisation for Economic Co-operation and Development) has now agreed, that it is 'burdensome' to have de-averaged wholesale prices and urban-rural retail parity."

But the Government has moved to head off Telstra's threats to raise retail prices in country areas. It will tweak new price controls on Telstra due to start on January 1 by forcing the telco to offer a national price for its sparsely used Home Line Part monthly line rental service. Telstra already offers such a service but it will now be capped for 18 months.

Finance Minister Nick Minchin, who supports Telstra's plea for an average price, and Senator Coonan have been at loggerheads on the issue. Sources from both camps characterised yesterday's move as a win.