Telstra's competitors have welcomed a move by the
nation's competition regulator to restrain what it sees as
anti-competitive pricing behaviour, but the heavyweight
claims its prices are "fair and justified".
The Australian Competition and Consumer Commission (ACCC)
issued a notice to Telstra last night claiming the carrier acted
anti-competitively in its implemention of a wholesale line rental
price increase on its "Home Access" product in December.
The so-called "Part A competition notice" allows third-parties
to take legal action to recover loss or damages resulting from an
Those affected by the December price change applauded the
"The ACCC has acted appropriately in issuing the competition
notice against Telstra," a spokesperson from the nation's
second-largest telco Optus said in an e-mailed statement.
"Telstra needs to be called to account for its intimidating
behaviour and Telstra's new management must learn what the rules
in Australia are."
The Competitive Carrier's Coalition (CCC), a group
representing tier-two carriers Macquarie Telecom, PowerTel,
Primus, iiNet, Hutchison Telecoms, TransACT and Agile
"The ACCC was to be congratulated for standing up to Telstra's
bullying tactics and anti-competitive behaviour by issuing a
competition notice today," the CCC said in a statement issued
"It is crucial that the ACCC now act quickly to follow up
today's move by taking court action to have Telstra fined for its
behaviour," CCC executive director David Forman said in the
iiNet's general manager of regulatory affairs Steve Dalby told
ZDNet Australia in a telephone interview today his company was cooperating
with the ACCC on the issue.
"We've been involved with discussions with the ACCC since
around around Christmas I guess, when Telstra made that change to
its pricing structure," he said. "We'll continue to help them
with their enquiries."
However Telstra said its December price increase was "fair and
justified", and the issue was not as simple as it appeared.
Telstra's group manager of regulatory affairs Dr Tony Warren
said competitors commonly used the Home Access product as just
one component of a larger bundle of services to customers.
"Over the bundle there is sufficient margin," Telstra's
"The ACCC contends there are competition issues in the Home
Access charge because access in itself is not profitable," said Warren.
"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."
"The ACCC's decision to issue a competition notice is not a
finding of guilt, nor does it imply the matter will automatically
be adjudicated by a court," pointed out Warren.
"However, Telstra is prepared to strongly defend its
position," he added.