Monday, July 20, 2009

Telstra as nasty as ever under its new management

If the new manager had been on top of his game he would have pulled out of this as soon as he took over

TELSTRA'S latest attempt to inflate the price of wholesale access to its copper network has backfired, with the Federal Court yesterday dismissing 14 legal claims launched by the telco.

The proceedings, which were launched against the Australian Competition & Consumer Commission and 14 of the nation's largest internet service providers, including Optus, Macquarie Telecom and Primus, related to the access price that Telstra's competitors pay to use its copper network to offer voice and broadband services to consumers.

The copper-based services in question -- unconditioned local loop services (ULLS) and line sharing services (LSS) -- are used by many of Telstra's competitors to offer broadband services such as naked DSL to consumers. Naked DSL is a high-speed broadband offering that does not require a telephone connection to access the internet.

Currently the ACCC sets access pricing to Telstra's copper network at $2.50 a line per month for LSS services and $14.30 a month for ULLS.

But in Telstra's claim to the Federal Court, the telco argued that its competitors should be paying $9 a month for LSS and $30 a month for ULLS.

A rise in the monthly charge would out-price Telstra's competitors offering telephony and internet services in competition.

For more than five years Telstra has lobbied the competition watchdog to impose a $30 monthly access fee on wholesale customers who wish to use Telstra's copper network to deliver telephony and internet services to customers in metropolitan areas.

But in a reiteration of previous rulings on access pricing, Telstra's claims were dismissed by judge Kevin Lindgren after he found the current price declaration set by the ACCC was adequate.

Telstra has now been left to foot the combined multi-million-dollar legal bill for each of the 14 parties.

Telstra declined to comment on the judgment, but rival telco Optus did not hold back. "This is yet another failed attempt by Telstra to overturn an ACCC decision with a view to setting ridiculously high prices for access to its network. Telstra failed before the ACCC and now the Federal Court," Optus director of government and corporate affairs Maha Krishnapillai said.

"Today's outcome is a crystal-clear example of why, in the lead-up to the NBN (national broadband network), regulatory reform cannot be done on the basis of tinkering. The ACCC must be given tougher and more certain powers to ensure Telstra's ability to create delay, fear and dampen investment in the sector is eliminated."

ACCC chairman Graeme Samuel said the regulator was pleased with the outcome.

"It vindicates the robustness and the rigour that the ACCC applies in making these decisions and it potentially has some implications for the future decisions that we have to make in respect to a number of disputes we currently have before us," Mr Samuel said.

The long-running dispute between Telstra and the ACCC about access pricing has been a costly war for the telco.

In late April, the ACCC rejected an appeal from Telstra to charge its rivals $30 a month to use the telco's last mile copper network in metropolitan areas.

That decision is under appeal with the Australian Competition Tribunal.

Many of Telstra's legal wranglings are a legacy from the telco's combative former chief executive Sol Trujillo, who never shied from pumping millions of dollars into legal battles to maintain the telco's market dominance.


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