The Australian consumer watchdog, the Australian Competition and Consumer Commission, has issued Telstra with an advisory notice over concerns that the communications giant has breached competition laws by dropping broadband retail prices below their wholesale charges.
A spokesperson for the ACCC said the notice was advising Telstra of the commission's investigation of the matter, and that the action may be a precursor to the issuing of a competition notice.
The ACCC said it had already advised Telstra to "reduce its wholesale prices to a level below Telstra's retail prices that would allow Telstra's wholesale customers to provide retail broadband services at prices which do not substantially hinder or prevent them from competing with Telstra".
The ACCC said concerns arose at the announcement of Telstra's budget priced retail broadband plans and were further confirmed by protests from its competing wholesale broadband customers.
Its investigation is focussing on whether Telstra's pricing amounts to anti-competitive conduct in breach of the telecommunications-specific provisions in the Trade Practices Act 1974.
Rod Bruem, a spokesperson from Telstra, told ZDNet Australia in an earlier interview that the ACCC had been aware of the broadband pricing plans well before their release. However, the ACCC spokesperson says they were only given short notice -- less than two weeks before their release on 27 February.
"There was only a very short timeframe from when Telstra told us of the prices to the public announcement," said the ACCC spokesperson, adding that the commission had concerns about it right away.
The warning comes as part of a habitually rocky relationship that Telstra has had with the consumer watchdog, as the company has been investigated over its broadband prices in the past.
In September 2001 the ACCC issued Telstra with a pending competition notice as it said it was 'engaging in anti-competitive conduct' over the way it treated its wholesale broadband customers.
The company was given six months to rectify its behaviour. However, the ACCC was not satisfied with their response and activated the competition notice in March 2002.