ISPs have responded angrily to reports the ACCC is considering lifting its competition notice against Telstra for anti-competitive behaviour in the broadband market.
The watchdog has held ongoing talks with Telstra’s wholesale customers, as well as the telco giant, since issuing the notice on March 19. If found guilty of anti-competitive behaviour, Telstra could be fined a maximum penalty of $10 million, plus $1 million per day from the date the competition notice was first issued. As of June 11, the penalties were worth up to $95 million.
Internode managing director, Simon Hackett, said the anti- competition notice should remain because the telco had not yet done enough for its ISP customers to merit its removal.
“We hope the ACCC will continue to progress the related actions they are able to undertake to enforce further change in the conduct cited in the notice,” he said.
Although Telstra continues to claim to be renegotiating its broadband wholesale deals at an individual customer level, Hackett said the telco had not yet done so with Internode.
“They presented us with the same offer as everyone else,” he said. “This isn’t the first time Telstra has taken the industry through such a cycle — it’s the second competition notice, not the first, they have received on this topic after all.
“We have taken the best current ambit offer, because it’s better than nothing, while maintaining our clear position that it’s not good enough and further movement is needed.”
ACCC spokesperson, Lin Enright, said the competition watchdog was undertaking ongoing enquires into Telstra’s broadband pricing, but denied these enquiries had resulted in any formative decision on whether to lift the anti-competition notice itself.
The ACCC notice was prompted by the launch of a $29.95 per month retail broadband product in February.
Telstra revised its wholesale pricing in April, introducing a new Protected Rates packages for its wholesale customers priced at 40 per cent less than the retail equivalent. Instead of charging ISPs $29.75 per ADSL customer per month on a 256/64Kbps plan, the telco dropped the figure to $15.55 per month (ex GST) including 300MB of data.
A second Growth Option package was introduced, giving wholesale customers additional discounts for signing up to higher-speed services.
Under this plan, access per port at 256/64Kbps speeds is charged at $27 (ex GST).
Commenting on the competitiveness of Telstra’s wholesale pricing structure, spokesperson Rod Bruem said the company had considered its pricing to be fair from the start.
The wholesale changes instituted in April were extremely competitive, he said.
But despite the new access packages, Netspace managing director, Stuart Marburg, said his company was still unable to compete with Telstra retail on a medium or long-term basis. “We’re buying access at $27 excluding GST — $29.70 with GST [on the Growth Option plan]. That’s $0.25 [per customer per month] to pay our staff, Internet access, rent, and all those normal things,” he said.
Like Hackett, Marburg said Netspace had not had a lot of interaction with Telstra on an individual wholesale customer level, despite making a number of suggestions to the telco about pricing improvements.
And even with the competition notice in place, Telstra was undertaking further anti-competitive behaviour, Marburg said.
He pointed to BigPond’s offer of a free connection to new ADSL customers this month as another example of continued anti-competitive behaviour.
“Imagine what they would do without the notice in place,” he said.
Marburg said ISPs were demanding one of two things: that Telstra brought the price of wholesale broadband access down to $20 per port, or allowed its ISP customers to subscribe to both its Protected and Growth plans. While some ISPs might continue to protest, Bruem said the majority of Telstra’s wholesale customers, representing about 80 per cent of subscribers connected to broadband via Telstra’s wholesale division, had been signed under the new pricing arrangements.