Updated - Internode and iiNet: Further Telstra price cuts will make things worse

this is the resoult of the the telstra competitors attacking telstra whit price cuts and instigating problems for telstra iam telstra shareholder its lovely to see this price cuts i wald like to see telstra stop dividend for five years and compete aggressively . proud telstra shareholder

Nice spelling, Tony

Would you consider yourself typical of Telstra shareholders?

Let me get this right? The price of the service is coming down, so as a consumer we should be unhappy that competition is working? If this means that my iinet service that I use at home is cheaper for me, then great, perhaps my ISP should work out how to maximise its revenue streams, rather than relying on the services of another company. If my business tried to markup a product by more than 5% where I added little value to, I don't think that my customers would purchase from me either. However if the customer perceives a value in the service then they will happily pay for this value, this is why I have stayed with iinet for the past 8 years, as I value the service that they provide. Therefore Telstra dropping their prices will not affect my choice of service provider, am I not the normal home consumer?

I think you're missing the point Tony/Hydrans.

Telstra own the infrastructure on which they wholesale services to other ISP's. However what they are offering via their own retail channels is cheaper than that which is available to their competitors (read: wholesale *customers*) on a wholesale level and hence this is anti-competitive.

You need to remember that whilst these ISP's are using Telstra's infrastructure this is largely only for the last mile, i.e from the exchange to your premises. Their value add is that they offer superior services/support on the rest of their OWN network, which they have paid for.

They aren't necessarily complaining about the fact that pricing is coming down, this generally happens over time due to competition and the costs to deliver services reducing which is then passed on to the customer, the ISP's understand this, their complaint is that the Retail price that Telstra Bigpond is selling at is cheaper than what they can buy it from Telstra Wholesale and therefore they are unable to compete with the monopoly stranglehold that Telstra has over Australia Telecommunications network.

This is another reason that the NBN will be good for the country as we will have a Wholesale only organisation supplying the services to the telecommunications companies, and not competing with them in its own right.

Telstra only owns the copper, which is resold under ULL, which costs around $7-15 a month for almost all suburban areas. The ULL can't get much cheaper, unless you want Tesltra to start giving it away for free. Telstra has no monopoly over wholesale phone line rental, only the ULL (which is regulated under a seperate third party so it can be controlled by ACCC)

Companies like iiNet and Internode choose to have their line rental through Telstra (they are not forced to). Other companies like Optus and iPrimus use the ULL directly and do their own line rental.

If the price squeeze is really an issue for iiNet and Internode, they can just make their own line rental (or use another companies which could be more profitable for them)

ull is mostly cities. you are forgetting about i think it's lss.

there 2 different things, telstra wholesale (reselling telstra services) and last mile copper (ull) which uses an isps own equipment not telstras.

so lss is dearer!

ISP's complain about prices being too high complain about prices being too low...

whinge whinge whinge.... what about setting aside some promotional dollars and promote instead of whinging?

iiNet and Internode both use ULL/LSS where they have been able to build a business case to support installing their own infrastructure. They can;t build the infrastructure to support ULL/LSS everywhere as they would be unable to receive returns to pay for this infrastructure. It does not make business sense to do this. This is why the Coalitions idea of a privately funded NBN is complete rubbish and won't work. This is the state we're in now and will continue to be if we don't get something built and funded largely by the Government with some private investment.

Both of these organisations have invested heavily using their own funding to build infrastructure to compete with Telstra and both continue to do so despite having to deal with Telstra and their stranglehold.

In areas where these organisations can't invest (it is too costly with little return - think regional areas) they are forced to Wholesale from Telstra, using Telstra's ADSL Ports and backhaul. The complaint that they are making is that Telstra Retail (Bigpond) appear to be able to access these ports/backhaul at a lower cost than certain other ISP's - This behaviour is anti competitive, you cannot have a retail arm that sells cheaper than your wholesale arm sells to your competition.

Don't forget the only reason Telstra has this infrastructure is because the Government built it using YOUR tax dollars before it was privatised.

The point is that Telstra do not 'own' the infrastructure. The Australian public 'owns' the infrastructure. The govt gives and the govt can, and should, take away where necessary.

This is complicated by the 'sale' of Telstra and the shareholders demand - rightly so - for a returm. As soon as one share was sold, it was obvious to we employees (at the time) that this conflict was coming.

Hence the role of the ACCC - to keep Telstra from just following shareholder demands and competing using the power it wields over infrastructure - infrastructure that it is really only the guardian for.

That was Sol's mistake - he 'forgot' that we all own the infrastructure and Telstra, despite privatisation, is still under the command of legislation. He tried to ignore this and oversaw the biggest drop in satisfaction and shareholder value in T's history. What a success.

ISP's use more than just the ULL. Co-location, DSLAMS, network. In many places there is no alternative but to use T's hardware. And as co-owners they have a right to do so competitively. If T is going to sell in the wholesale space it has to be arms length. Every connection an ISP buys should be the same price for all.

This is not new. When T started the $29.95 for 200mb plans years ago it was cheaper than the wholesale. They are just trying it on, the ACCC will slap them down yet again and we will all benefit.

Separation is the answer. It's coming despite all the whining from T that it's too hard and too expensive. And not soon enough.

Llama

@Liama, you've got to be kidding?! Telstra was sold for over $50Billion. It matters not in the slightest how the infrastructure was built or by whom, once sold, sold it is. Akin to building a home with your own money, then selling it but expecting to have rights back to it! Taxes were also used to create Qantas, CSL, ANL etc and all were sold by our market loving, economic rationalist governments of both persuasions. I disagree with there sale, but once sold, then WE DO NOT OWN them in any way shape or form.

As for your claim that the government can take anything it wants, thank God you're wrong, imagine what the NSW state government can do with that little nugget of power, they'd thieve everything in sight. You seem to lack knowledge of the Aus constitution and specifically Art 51 which specifically denies government the right to expropriate private property without full fair compensation. Conroy tried desperately to work out some way were he could do what you advise and simply take Telstra's network without paying or paying very little. The fact that he eventually agreed to an $11 billion payout shows he couldn't circumvent the constitution.

End result of all this is that Telstra once again screws us all over! It appears by submissions to the ACCC that Telstra is supplying some wholesale customers (ISPs) with a cheaper base price on ADSL, than other ISP's, because those ISP's cant compete diectly with Telstra because they have no infrastructure of their own to directly compete. This has the effect of allowing those "chosen" non-threatening ISP's to undercut other ISP's. Defintely not a fair deal for anyone!! The only way Telsta will ever provide a good level of service is when they have some actual competition, and they lose their money spinner of copper network to each house. They are apparently through door to door onsellers actively giving better deals by far to non Telstra users than Telstra users are already getting. A great way to look after your customers not ! , screw them while they are locked in and undercut the competition, while making it impossible for other ISp's to compete because of higher charges. No wonder some users will use anyone else except Testra, even if it costs more !!

@Mo , the government can take any business over if you know, the government can enact the Nationalisation laws over any industry/company. It is unlikely to happen in Australia but these laws do exist, also they could take your house if it was in the national intrest, like your house was in the way of federal project. Some of these laws do exist in States like Victoria, the governent there is building a new road people houses were cumplosory acquisitioned so they could build the new road. But the difference on that occassion is people where compensated financially or a new house.