ACCC should sue Telstra: Carrier group

Summary:ACCC should sue Telstra, says carrier group

A group representing rival telecommunications carriers today said the competition regulator should have prosecuted Telstra rather than simply issuing a notice against its bad behaviour on wholesale line rental increases.

The Australian Competition and Consumer Commission (ACCC) this morning revoked a competition notice it issued to Telstra last April, saying new regulations would ensure the telco charged fair wholesale line rental prices. The notice was issued after Telstra raised prices in December 2005, and has since provoked a multi-million dollar lawsuit against Telstra by the nation's number two telco Optus.

But the Competitive Carrier's Coalition (CCC) -- a lobby group representing telcos such as Hutchison, Macquarie Telecom, Verizon, PowerTel, Primus and iiNet today said the ACCC hadn't gone far enough.

"The ACCC has never taken Telstra to court in any of the five competition notices it has issued, despite maintaining in each case that it believed Telstra was breaking the law," the CCC said in a statement issued by executive director David Forman.

"We have reached a situation that is unsustainable," Forman added, claiming there was either a problem with the law, or the administration of the law, that made it unworkable against an organisation "with Telstra's power".

Forman pointed out it was only the ACCC that could penalise Telstra financially for anti-competitive behaviour. "The Parliament increased the penalties for anti-competitive conduct to AU$3 million a day, making clear its intention that it expects tough action and strong deterrence," he said.

The CCC director also took aim at the ACCC's suggestion that its move last year to declare -- or regulate -- Telstra's wholesale line rental service would resolve the issue highlighted by the competition notice.

"There are fundamental problems with this approach," he said. "Firstly, it shuts the gate after the horse has bolted, won the cup, and cashed the winner's cheque. Secondly, it does nothing to punish Telstra or compensate competitors for the period when a price squeeze was in place."

Forman said the ACCC's approach demonstrated by this morning's decision was "a recipe for ever-expanding regulation" as Telstra could gain advantage in one market after another while the ACCC followed behind.

"It disadvantages smaller carriers who do not have the resources to be taking continual disputes with Telstra to the ACCC to be arbitrated bilaterally," he said.

Topics: Telcos, Government, Government : AU, Legal, Telstra

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