ACCC considers lifting Telstra broadband notice

Australia's competition watchdog has asked for submissions on whether changes made by Telstra to its wholesale ADSL broadband pricing plans justified removal of a notice alleging the telecommunications company was breaching competition rules.The Australian Competition and Consumer Commission released a statement yesterday saying it was "determining whether or not it should revoke the 'Part A' Competition Notice issued in relation to Telstra on 19 March 2004".

Australia's competition watchdog has asked for submissions on whether changes made by Telstra to its wholesale ADSL broadband pricing plans justified removal of a notice alleging the telecommunications company was breaching competition rules.

The Australian Competition and Consumer Commission released a statement yesterday saying it was "determining whether or not it should revoke the 'Part A' Competition Notice issued in relation to Telstra on 19 March 2004".

However, the ACCC today stressed that this procedure did not encompass whether Telstra's behaviour during the period covered by the notice was anti-competitive, leaving the way open for the regulator to take action, should it choose to do so, for breaches during that time. ACCC chairman, Graeme Samuel, told ZDNet Australia  today the competition regulator would probably take "three to four weeks" to consider submissions -- which are due by 14 January -- and make a decision on the fate of the notice.

When issuing the so-called 'Part A' notice in March, the regulator said the telecommunications heavyweight had engaged in anti-competitive conduct in relation to broadband pricing. Rival Internet service providers had complained after Telstra in February slashed its lowest retail broadband price to AU$29.95 per month -- lower, its rivals complained, than the wholesale charge they were being levied for access to Telstra's broadband connections.

The notice allows rivals to seek damages and compensation for anti-competitive conduct while it is in force, while the competition regulator can undertake pecuniary measures through the Federal Court over the carrier's behaviour. The court can impose an AU$10 million penalty for each rule breach, plus AU$1 million per day each day that the infringing behaviour continues.

The regulator said yesterday that, since it issued the competition notice, "there have been a number of developments which include Telstra revising its wholesale pricing and negotiating with wholesale customers.

"The most recent revision was notified to the ACCC to take effect from 1 January 2005, following which Telstra requested that the ACCC revoke the competition notice".

The ACCC's review is to examine the "full impact" of these changes on competition among Internet service providers "to determine whether or not it has reason to believe that Telstra is currently engaging in anti-competitive conduct," the watchdog said.

"Consequently, the [ACCC] is seeking written submissions from interested parties in response to Telstra's reduced wholesale ADSL pricing as to whether or not to maintain the competition notice," the regulator said.

A Telstra spokesperson confirmed to ZDNet Australia  the telecommunications heavyweight had written to the ACCC late last week asking for the competition notice to be lifted.

He acknowledged that there had been some flat-rate wholesale broadband price reductions within the past few days, but declined to comment further, citing customers' desire to keep those arrangements confidential.

However, he added "we believe that wholesale price reductions have been delivered continuously over the past year and helped the market grow and there is no need for the competition notice to remain in place".

The ACCC and Telstra have been at loggerheads over the pricing cuts since they were announced, with the telecommunications player arguing both publicly and in private discussions with the regulator they played a key role in seeing the Australian broadband market almost double in size.

However, the telecommunications company has conceded that, in the past, it has not always provided the competition regulator and its wholesale customers with reasonable notice of price changes. It has since implemented a more systemic approach to ensure the ACCC and customers were informed more quickly and reliably of its initiatives.

With full privatisation looming once the Senate numbers change from 1 July, the carrier has additional impetus to thaw its often frosty relationship with the competition regulator. While the ball is in the ACCC's court with regard to any action that may be taken over breaches during the notice period, the carrier no doubt hopes the prospective lifting of the notice is the first step towards bringing the broadband pricing brouhaha to a halt.

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