ACCC issues broadband notice to Telstra

ACCC issues broadband notice to Telstra

Summary: The Australian consumer watchdog, the Australian Competition and Consumer Commission, has issued Telstra with an advisory notice over concerns that the communications giant has breached competition laws by dropping broadband retail prices below their wholesale charges.A spokesperson for the ACCC said the notice was advising Telstra of the commission's investigation of the matter, and that the action may be a precursor to the issuing of a competition notice.

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The Australian consumer watchdog, the Australian Competition and Consumer Commission, has issued Telstra with an advisory notice over concerns that the communications giant has breached competition laws by dropping broadband retail prices below their wholesale charges.

A spokesperson for the ACCC said the notice was advising Telstra of the commission's investigation of the matter, and that the action may be a precursor to the issuing of a competition notice.

The ACCC said it had already advised Telstra to "reduce its wholesale prices to a level below Telstra's retail prices that would allow Telstra's wholesale customers to provide retail broadband services at prices which do not substantially hinder or prevent them from competing with Telstra".

The ACCC said concerns arose at the announcement of Telstra's budget priced retail broadband plans and were further confirmed by protests from its competing wholesale broadband customers.

Its investigation is focussing on whether Telstra's pricing amounts to anti-competitive conduct in breach of the telecommunications-specific provisions in the Trade Practices Act 1974.

Rod Bruem, a spokesperson from Telstra, told ZDNet Australia   in an earlier interview that the ACCC had been aware of the broadband pricing plans well before their release. However, the ACCC spokesperson says they were only given short notice -- less than two weeks before their release on 27 February.

"There was only a very short timeframe from when Telstra told us of the prices to the public announcement," said the ACCC spokesperson, adding that the commission had concerns about it right away.

The warning comes as part of a habitually rocky relationship that Telstra has had with the consumer watchdog, as the company has been investigated over its broadband prices in the past.

In September 2001 the ACCC issued Telstra with a pending competition notice as it said it was 'engaging in anti-competitive conduct' over the way it treated its wholesale broadband customers.

The company was given six months to rectify its behaviour. However, the ACCC was not satisfied with their response and activated the competition notice in March 2002.

Topics: Broadband, Government, Government AU, Telcos, Telstra, NBN

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4 comments
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  • Telstra are being (typically) dishonest. Aside from issues over retail vs wholesale pricing, there are many people who will be lured by the "29.95" pricing, not realizing that 200Mb (the limit) is next to diddely in broadband terms. Many people will be stung by big excess usage charges on their first bill yet be locked into a 12/24 month contract from which their only recourse (to make it usable) will be to upgrade to a higher plan, higher price, probably higher than what's out in the market anyway. This amounts to deceptive and dishonest conduct by Telstra and should be stomped on by the ACCC regardless of the retail vs wholesale issue.
    anonymous
  • So what if they are dropping the price, it will give us a more competitive market. Currently broadband prices suck for the amount of data transfer on offer. 200Mb on 256k ADSL is really only worth $2.00/mth. I get 2Gb on my dialup for $19.95/mth, even thou I don't use it all, it is there.

    DIAL-UP SHOULD BE WIPE OUT AND BROADBAND SHOULD BE THE ONLY SERVICE AVAILABLE IN METRO AREA'S.

    Internet content is getting bigger and larger, we need lower prices and higher data bandwidth. Most game/software demos are becoming quite large, 100mb, 200mb even upto 500mb. So I think telstra is doing the right thing, and the ACCC should just piss off.

    The ACCC is the reason why we are stuck with over priced communication services, like broadband and mobile phones.

    The more people using broadband the more money gets made, currently statistics still say that broadband is still not within reach of most people, except those brave enough to take it up, or the rich who don't give a shit.

    I will still use my dial up until broadband come to reasonable price and generous data limits, since we can get upto 100 times more data on broadband then a modem, so I am looking at data limits. If telstra wants to drop their prices to wholesale, who cares, it is still going to benefit the government, as more people will start to use it, but the assholes don't see it that way.

    Go ahead telstra, take on the ACCC and tell em where to go, is what I say.
    anonymous
  • I think Mr Mark missed the point of why people are complaining. How can the market be competative, when every ISP that has to use Telstra for its wholesale provider, will loose a minimum of $20 per customer they would get if they were to offer the same plan. Where as telstra would not be loosing any money.
    anonymous
  • The price is irrelevant if Telstra won't provide broadband in the first place! If you live in the country, even a mere 30Km outside a major city such as Canberra, Telstra refuses to provide lines that can support ISDN or ADSL broadband.
    anonymous