Thursday, August 6, 2009

The Gorilla Telco again

Telstra admits denying access

TELSTRA could face a fine of up to $300 million after admitting to the Federal Court it was guilty of misleading and deceptive conduct in denying competitors access to its copper network.

It is understood Telstra made the startling admission in a defence filing lodged with the Federal Court on July 31. In it, the telco admitted it had failed to comply with its access obligations as outlined under the Telecommunications Act 1997, thereby contravening a condition of its carrier licence.

The admission relates to a court case brought by the Australian Competition and Consumer Commission in March, which alleges Telstra violated its obligations to users of its unconditioned local loop services and line-sharing services.

Under standard obligations, Telstra is legally required to allow access to its telephone exchanges so competitors can install equipment to provide new voice and broadband offerings for customers.

The ACCC has said Telstra refused access at seven of its metropolitan exchanges by claiming they were full and there was no capacity left for rivals to install new equipment.

The watchdog also alleged Telstra engaged in misleading and deceptive conduct by publishing lists of capped exchanges on the Telstra wholesale website.

In the March filing, the ACCC said it would seek declarations, pecuniary penalties and injunctions against the telco.

The Telecommunications Act says a contravention can carry a penalty of up to $10m per breach. Thirty alleged breaches have been filed, but it is unclear how many of these Telstra has admitted guilt to.

The Federal Court in Melbourne yesterday held a directions hearing to gather additional evidence from access seekers before an appropriate penalty could be imposed by the court.

The next directions hearing has been set for October 2.

Telstra's humbling admission to the ACCC's allegations is in stark contrast to the combative stance the telco adopted under the tutelage of former chief executive Sol Trujillo.

But with Mr Trujillo out of the picture, new chief executive David Thodey has moved to clear its legal deck of any embarrassing anti-competitive misdemeanors.

Mr Thodey's conciliatory approach has helped mend bridges with the government and comes as the telco is preparing to re-engage the government with its new national broadband network plans.


No comments: