Optus to court Telstra tomorrow

The action stems from a recent notice issued by the Australian Competition and Consumer Commission (ACCC), allowing third parties to take legal action resulting from Telstra's decision to raise the wholesale price of its Home Access product in December.

Optus claims Telstra raised its wholesale line rental prices above those of its retail prices. "Telstra is trying to use its market power to drive its resale competitors out of the marketplace," said Optus director of corporate and regulatory affairs Paul Fletcher in an April statement.

Optus is suing Telstra in the Federal Court for breaches of the Trade Practices Act.

However Telstra has said the company's prices were "completely fair and justified" and that Optus' price comparisons were misleading.

"Home Access is just one component of what the wholesale operator would provide the end user in terms of a total product offering ... which would also include long distance, international and fixed-to-mobile calls. It may also be part of a total bundle including broadband," said Telstra's group manager of regulatory affairs Dr Tony Warren in an April statement.

"It's like saying a sandwich shop should profit on every ingredient used in a salad sandwich, when common sense says only the overall margin matters."

In a related case, Telstra has mounted its own legal challenge against the ACCC's competition notice, also in the Federal Court.

Telstra has claimed the ACCC used different arguments than those contained in an earlier consultation notice.

While neither the ACCC or Telstra had spokespeople immediately available to comment on that case, it is understood to be proceeding.