ACCC cautions Telstra over broadband pricing

ACCC cautions Telstra over broadband pricing

The Australian Competition and Consumer Commission (ACCC) has slapped Telstra with an Advisory Notice, advising the telco giant to drop its wholesale broadband rates and warning Telstra against engaging in anticompetitive conduct that contravenes the Trade Practices Act 1974.

The ACCC’s action is in reaction to Telstra slashing the retail price of its broadband Internet services recently, preventing many smaller ISPs from being able to compete on price.

The ACCC received numerous complaints that Telstra’s new retail prices were below its wholesale rates.

In the Notice, the ACCC advised Telstra to reduce its wholesale prices to a level below Telstra’s retail prices that would allow Telstra’s wholesale customers to provide retail broadband services at prices which do not substantially hinder or prevent them from competing with Telstra.

“The inability to compete, especially at the important entry-level end of the market may also ultimately foreclose more sustainable access-based competition at a vital stage of broadband growth in Australia,” ACCC chairman, Graeme Samuel, said.

The Advisory Notice does not preclude the ACCC from issuing a competition notice or taking such further enforcement action.

“Telstra will need to closely consider whether it implements its planned retail price reductions, or alternately reduces wholesale prices for its competitors,” Samuel said.

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