Telstra slams ACCC court foray

The Australian Competition and Consumer Commission's (ACCC) decision to take Telstra to court for allegedly lying about being unable to provide wholesale services to other carriers was a waste of court time and money, the telco said today.

David Quilty (Credit: Telstra)

"The ACCC is suing us for something we proactively and voluntarily reviewed and fixed a year ago," Telstra's group managing director, public policy and communication, David Quilty said in a statement this afternoon.

Since we fixed the problem a year ago, the ACCC has not once suggested it had problems with our new processes

Telstra's David Quilty

Telstra said it had started a review of its processes for determining when an exchange building was full in the beginning of 2008 and that the ACCC had from July last year received good insight into what the company was doing by introducing new regulations which forced Telstra to keep a record of activities in telephone exchanges.

Until now, Telstra said, the Commission had not notified the telco of any problems with its processes.

"There was an issue and we fixed it — without the involvement of the ACCC. Since we fixed the problem a year ago, the ACCC has not once suggested it had problems with our new processes," Quilty said.

Telstra has more than 5,000 exchanges, according to the company, which said that originally 76 had been listed as full, but that as a result of the review, 24 exchanges were immediately removed from the list with 24 others listed as "potentially capped". According to the ACCC this means an exchange is capped until out-of-the-ordinary works have been completed.

"You have a situation where a company proactively checks its processes, finds minor and inadvertent errors, immediately rectifies the problem but is hounded through the courts regardless," Quilty said.

Telstra is obliged to sell unbundled local loop and line sharing services to other telcos who want to provide voice or ADSL2+ broadband to their retail customers. The ACCC has alleged that Telstra refused access to seven key metropolitan exchanges because there wasn't any space for the access seekers to install their equipment in the exchanges when there actually was space or could have been with some action.

iiNet's chief regulatory officer Steve Dalby said that the case showed the need for "substantial and wide sweeping" regulatory reform, including complete structural separation of Telstra and the National Broadband Network (NBN) regardless of who built it. He also said it showed why Telstra should not be given the keys to any new network.

He said that Telstra had prevented iiNet from servicing customers by falsely claiming exchanges were capped on numerous occasions.

Today's action is by the ACCC shows why delivering the NBN with clear regulatory guidelines is the most important decision ever made for Australian Broadband consumers

Optus' Andrew Sheridan

"Customers have been, and will continue to be, the losers with slower, more expensive and less broadband competition until full regulatory reform is undertaken and Telstra is broken up," Dalby said

Optus was quick to point to its NBN proposal as a way to end the pain. "Today's action is by the ACCC shows why delivering the NBN with clear regulatory guidelines is the most important decision ever made for Australian Broadband consumers," Andrew Sheridan, general manager of regulatory at Optus, said in a statement.

"Optus' NBN proposal clearly outlines how to mend and thus unlock the true benefits of broadband — availability, choice, high speeds and affordable prices."

He said that the action showed that a regulation-free industry was impossible with Telstra. "If we did remove regulation can we really trust Telstra to guarantee open and equivalent access for its competitors?" he asked. "The current dysfunctional state of the fixed line market would indicate that the answer is a resounding no."

The Competitive Carriers' Coalition said its members had been complaining for years about access to Telstra exchanges and the case showed why no National Broadband Network operator could be a wholesaler and a retailer of services.

The Federal Court is holding a directions hearing on the matter on Friday 17 April in Melbourne. The ACCC will be looking to slap monetary penalties on Telstra if it succeeds in its case.