Internet providers back ACCC call on Telstra

The Western Australian Internet Association and South Australian Internet Association have lauded the Australian Competition and Consumer Commission's (ACCC) recommendation on Telstra's Line Sharing Service (LSS) monthly access charge.The ACCC last Friday rejected Telstra's proposed LSS access charge of AU$15 and instead recommended it range from AU$7 to AU$8.

The Western Australian Internet Association and South Australian Internet Association have lauded the Australian Competition and Consumer Commission's (ACCC) recommendation on Telstra's Line Sharing Service (LSS) monthly access charge.

The ACCC last Friday rejected Telstra's proposed LSS access charge of AU$15 and instead recommended it range from AU$7 to AU$8. ACCC pointed out that AU$15 will "not promote competition" and is "unlikely to encourage service providers to invest in their own facilities to provide broadband services."

The LSS is a service that enables two carriers to provide separate services over a single metallic pair or line. It allows Telstra to supply basic telephone services to a consumer while also enabling its competitors to provide high-speed broadband services, such as ADSL, to the customer on the same line.

However, WAIA spokesman Charlie Stephens said that aside from the LSS access charge, ACCC should also consider "the other inequities at work, which discourage service providers from investing in their own broadband infrastructure."

iiNet group managing director Michael Malone said that a major area of contention is the high set up and disconnection fee if a service provider is using its own equipment.

"If we go through Telstra Wholesale, we get charged a AU$90 set up fee and a AU$60 disconnection fee if the customer moves in less than 6 months. If we use our own equipment, we get charged a AU$99 set up fee and an additional AU$99 if the customer leaves. So, if a customer wants to move across the street to another house, Telstra will charge us about AU$200," Malone said.

Malone added that they are concerned about the fact that Telstra is charging more for ISPs using their own equipment than when using Telstra Wholesale.

"Surely, this is anti-competitive behaviour," Malone said.

Agile Communications managing director and SAIA president Simon Hackett pointed out that both the monthly access charge as well as the high set up and disconnection fee have been the subject of repeated complaints to the ACCC "as well as well as fruitless attempts to get a sensible revision for years."

Netspace managing director Stuart Marburg said his company is looking at setting up its own broadband infrastructure through spectrum sharing. However, the high charges are discouraging him to pursue it.

"The high monthly access charges as well as the set up and tear down fees were definitely some of the nasties we encountered when we looked to putting in our own equipment," he said.

"While we see the point in having these fees, we think there definitely needs to be a revision. For starters, maybe they can bring down the fees so it is at par with Telstra Wholesale charges. I think the ACCC will have to exert some pressure to bring about this outcome, however. Telstra only moves when you put a gun to their head," Marburg added.

The ACCC emphasised that although they are addressing the concerns over the existing structure of the industry, they "do not aim to stop Telstra from competing vigorously in emerging markets nor legitimately exploiting the economies of scale and scope it brings to the markets."