Telstra lashes back at ACCC

Telstra has accused the Australian Competition and Consumer Commission of not giving it "sufficient guidance" in resolving a furore over broadband pricing that could see the carrier fined millions of dollars.

Telstra has accused the Australian Competition and Consumer Commission of not giving it "sufficient guidance" in resolving a furore over broadband pricing that could see the carrier fined millions of dollars.

The telecommunications carrier made the claim as it declined to rule out any changes to its pricing despite mounting a spirited defence of changes which saw retail prices drop to a level rival Internet service providers claimed was lower than the wholesale prices they were charged for access to Telstra's broadband infrastructure.

A Telstra spokesperson told ZDNet Australia today the telecommunications company and the ACCC were "in constant negotiation" over the pricing issue after the watchdog set a deadline of tomorrow afternoon for compliance with a consultation notice seeking information about the carrier's wholesale and retail broadband pricing.

The move is the final step before the ACCC issues a competition notice which could yield fines for the telecommunications company of up to AU$10 million and AU$1 million per day before the issue is resolved.

The spokesperson, Rod Bruem, said the ACCC had not given the carrier "sufficient guidance" throughout the matter, stating: "We believe our pricing is competitive and the ACCC has given us no direction to lower our wholesale prices."

"They're [the ACCC is] saying there's a problem, but they're not directing us how to fix it," said Bruem.

The debate erupted several days ago when Telstra slashed its retail broadband prices ahead of the kickoff by rival Optus of its residential DSL services, prompting the complaints from its rivals. The ACCC subsequently issued an advisory notice, which prompted Telstra to reduce its wholesale prices ex-GST to slightly below the level of its lowest retail price of AU$29.95 per month.

Bruem indicated the carrier was also thinking ahead to the possibility of court action over the pricing issue, remarking that Telstra had been treated although it was already guilty. The carrier would not waver in its pricing and "it's up to the ACCC if they want to go to court to fight it".

"The ACCC hasn't had a good record in the past with competition notices, they've backed down in court and had some mixed results," Bruem said.

Telstra argues their reduced retail prices have been an exercise in "loss-leading" to encourage broadband take-up amongst consumers.

Telstra's regulatory group managing director, Bill Scales, also said the ACCC's interference was making it more difficult to respond to wholesale customer concerns.

"By imposing itself on a very competitive market, the ACCC would put at risk the tremendous benefits consumers are enjoying," Mr Scales said.

The last competition notice faced by Telstra in 2001 also concerned its wholesale pricing structure, resulting in the communications giant lowering its wholesale fees.

Bruem said he "can't say" if the past response may reflect on Telstra's future actions in relation to the current proceedings.

According to Bruem, a competition notice can be issued at "any time" following the lapse of Tuesday's deadline.

"Lowering retail prices has been an exercise in growing the market," says Bruem, adding now it's up to the ACCC "to decide if it is legal for Telstra to try and grow the market in this way."