ISPs Call on ACCC to Examine Telstra ADSL2+ Expansion

By Greg McNevin

February 26, 2008: In the wake of Telstra’s decision to upgrade 900 exchanges to handle ADSL2+, a group of ISPs has come forward and demanded access to the expanded network, saying that if Telstra retains exclusive use competition will be substantially lessened.

The majority of the upgraded exchanges exist in areas that other players in the market currently cannot offer high-speed broadband access. If Telstra is allowed to retain exclusive use of the network, which the ISPs allege that the federal government has already agreed to, then there could be “a serious problem, both for the broadband sector and for Australian consumers and businesses" according to Internode managing director Simon Hackett.

Internode, along with iiNet, TSN and Westnet are calling out to the ACCC to re-examine declaring regulatory access to all DSL (Digital Subscriber Line) broadband services.

"Telstra clearly has a substantial amount of power in the market for wholesale broadband services,” says Hackett. “We believe that Telstra's decision not to offer wholesale access to ADSL2+ services will lead to a substantial lessening of competition."

“By excluding competitors from wholesale access to its ADSL2+ services, Telstra can lure customers of other ISPs into two or three-year contracts,” continues Hackett. “This substantial lessening of competition will clearly have an adverse impact on consumers, both in terms of price and the range of services available to them in the long term.”

Hackett says the joint action demonstrates the seriousness of the threat posed by Telstra's ADSL2+ access ban.

“By retarding competition in the broadband sector, it would mean higher prices and a poorer choice of services for Australian consumers and businesses.”

If the ACCC sides with the group and decides that Telstra is engaging in anti-competitive behaviour, it may issue a Competition Notice under section 151AKA of the Trade Practices Act. This would mean penalties of up to $10 million for each offence and a further $1 million for each day that a company is found to breach the anti-competition rules.

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