ACCC runs out of patience with Telstra's wholesale broadband delays

A Competition Notice issued by the Australian Competition and Consumer Commission to Telstra in September last year came into force today.

Since late last year the ACCC has believed that Telstra was engaging in anti-competitive conduct in the way it treated its wholesale broadband customers.

However, the ACCC allowed Telstra until now to correct its behaviour. As of today, competitors have the ability to seek damages from Telstra and it is open to the ACCC to take action against Telstra in the Federal Court with a view to obtaining substantial penalties.

"The ACCC put Telstra on notice last year that if it continued to refuse to provide the services that its competitors required to compete fairly with the Telstra BigPond products, Telstra would be exposed to significant penalties under the Trade Practices Act 1974", ACCC Chairman, Professor Allan Fels, said today. "In November the ACCC gave Telstra further time to get its house in order, principally to complete network upgrades that Telstra said needed to occur.

"Today Telstra's time ran out and the Competition Notice comes into force.

"It is disturbing that Telstra has still not offered the particular ADSL broadband technology that was requested by wholesale customers more than a year ago, particularly in light of the fact that recently Telstra retail has been availing itself of this technology. Telstra seems to be favouring its own retail business while continuing to delay services needed by its wholesale customers to enable them to compete with Telstra's retail business".

The ACCC sees the existence of competitive wholesale offerings as an important aspect of increased choice of broadband solutions - especially for residential consumers seeking access to high speed Internet services.

The Competition Notice will act in conjunction with the ACCC's activities in fostering facilities and access based competition to achieve increased choice for consumers.

In another development, the ACCC has closed a long-standing investigation into allegations of Telstra refusing to continue historic models of handing over data calls to the networks operated by Telstra's competitors. The ACCC has received advice that industry has established satisfactory interim arrangements prior to the migration of all data calls onto next-generation IP networks.

"Telecommunications services were forever changed with the development of digital technology. However, the largely analogue public telephone network operated by Telstra remains the dominant network connecting virtually all Australians. It is the terms and conditions on which this legacy network passes phone calls to customers connecting to new age digital networks that has the potential to affect ongoing investment in new infrastructure.

"Put simply, unless Telstra passes calls over to these competing networks on reasonable commercial terms, then network investment will dry up. The ACCC is pleased that the industry as a whole has recognised the importance of adopting interim arrangements whilst data traffic is moved off the old Telstra switched network".

The ACCC will also continue to assist the industry in efforts to establish long-term solutions to appropriate models for the interconnection of data services between networks. Next Gen interconnection models are being developed in conjunction with industry, the Australian Communications Authority and the Australian Communications Industry Forum.