Telstra-Adam takeover decision delayed again

Just over a week out from when the Australian Competition and Consumer Commission (ACCC) was set to decide on whether to let Telstra take over Adelaide-based internet service provider (ISP) Adam Internet, the decision has been delayed again at the request of Telstra.

Telstra signed a deal to pick up Adam Internet in October last year for a rumoured AU$50 million. The company plans to turn the ISP into a Jetstar-like national budget broadband company that will target the low-cost sector of the market where BigPond cannot compete. However, the company first needs the approval of the competition regulator.

Telstra's competitors, including iiNet, Macquarie Telecom, Vodafone, and Optus, all raised concerns with the regulator that because Telstra is the wholesale owner of the fixed copper network in Australia, it would offer a better price to Adam than it does to its retail competitors.

The ACCC delayed making a decison back in December, pushing the deadline out until February 7. That deadline has been extended today, with the ACCC posting on its website that the timeline had been suspended "upon request from Telstra," and a new decision date would be announced "in due course."

Telstra told ZDNet that it needed more time to work through issues surrounding the proposed takeover.

"We will continue to engage with the ACCC, and we're confident we can work through any concerns in a timely manner. Telstra and the ACCC need more time to consider the issues raised by the Statement of Issues."

In the Statement of Issues paper, ACCC chairman Rod Sims has said that the proposed takeover could significantly lessen competition in the fixed line and mobile sectors.

"This is because Telstra would have the ability and incentive to use its market power in wholesale markets to favour the Adam Internet business over its other wholesale customers, which is likely to foreclose competition in the relevant downstream retail markets," he said.