ACCC disregards Telstra's claims of progress in negotiations

The Australian Competition and Consumer Commission (ACCC) has responded to Telstra's claims the telco has negotiated commercial arrangements with 60 percent of its wholesale customers, saying in real terms "it doesn't account for much".

The Australian Competition and Consumer Commission (ACCC) has responded to Telstra's claims the telco has negotiated commercial arrangements with 60 percent of its wholesale customers, saying in real terms "it doesn't account for much".

The telecommunications giant was issued with a "Part A" competition notice last Friday following an ACCC investigation of alleged anti-competitive conduct; the action came as a response to Telstra lowering the price of its entry-level retail plans below that of wholesale broadband connections.

ACCC Commissioner, Ed Willett, says it is difficult to determine Telstra's progress in responding to the competition notice as it is the "quality of the negotiations" that will be evaluated.

"The fact that some negotiations have been concluded doesn't account for much", said Willett, adding, "Smaller ISPs might grab the first offer of lower prices for the time being."

Willett says the key consideration for the ACCC will be to determine "if the prices being negotiated will facilitate competition in the retailing of broadband further down the line."

A Telstra spokesperson has said today that they are "still trying to negotiate", however he maintains that "negotiating is difficult in the highly charged environment we've been facing".

Group managing director for Telstra, Bill Scales said in statement released last Friday that Telstra has already "negotiated commercial arrangements with the majority of our biggest wholesale competitors", adding that the ACCC's intervention may be doing more harm than good.

"Telstra believes that the ACCC's intervention in this very competitive market is unnecessary and could hinder the swift resolution of outstanding commercial negotiations," said Scales.

Although the ACCC states that Telstra is on no specific deadline to resolve issues related to the competition notice, Willett says "it's an urgent matter that needs to be dealt with as quickly as possible".

Yet Scales has said that some of its wholesale customers are refusing to cooperate, choosing instead to take a regulatory approach to resolving the issue.

"A minority of wholesale competitors have refused to negotiate ... and have instead embarked on a highly politicised approach calculated to spark regulatory intervention and prejudice the benefits consumers are enjoying," said Scales.

Both the ACCC and Telstra say they hope the issue can be resolved through commercial negotiations.

However Scales warns in the statement that "Telstra would be prepared to strongly defend its position should it be challenged."