Telstra drops appeal on 'misleading' Next G claims

Telstra has withdrawn its appeal against a Court ruling which found that it engaged in "misleading" and "illegal" conduct in its Next G advertising, following a decision by the Australian Competition and Consumer Commission (ACCC) which disputed claims about the coverage of the network.

The ruling was handed down by the Federal Court in December last year after the consumer watchdog initiated legal proceedings against the telco in September 2007 alleging that advertising taglines for its Next G handsets — such as "Everywhere you need it" — gave consumers the false impression that total coverage across Australia was available.

"Telstra's decision to discontinue its appeal proceedings brings a welcome end to this matter, and vindicates the ACCC's intervention to protect consumers from misleading marketing in the telecommunications industry," said ACCC chairman Graeme Samuel in a statement.

Despite having withdrawn its appeal over the ruling, a Telstra spokesperson said today that it had done "more than any other mobile phone provider to properly inform our customers of how to get the most from the Next G network".

"Our position on the outcome of the case has not changed and we continue to stand behind our network and the advertising. However, as the campaign in question has not run for over 10 months and is a distant memory, the CDMA network is now closed ... it is in the best interest of our shareholders and taxpayers to bring the episode to a close," said the spokesperson.

Michael Cosgrave, ACCC group general manager for communications told ZDNet.com.au that the regulator was "very satisfied" with the outcome now that Telstra had withdrawn its appeal against the findings.

"The appeal was due to be heard in a couple of weeks, and the legal wheels were all in motion ... but then they [Telstra] determined to withdraw their appeal, which clearly we [ACCC] thought was of little merit anyway," he said.

"We initiated the action in the first place because we were concerned that consumers may be purchasing handsets under the false belief that they had coverage everywhere in Australia, and it was essential to correct that misapprehension," said Cosgrave.

Telstra must now cover the ACCC's costs over the course of the appeal and last year's initial legal proceedings.