ISPs are not ‘crying poor’ when they complains about Telstra’s wholesale prices, according to Internode.
Internode managing director, Simon Hackett, decided to clarify for consumers what the company's stoush with Telstra is all about with a follow-up blog post to his entry last week.
The South Australia-based ISP has publicly expressed its disdain over Telstra’s alleged ‘price squeeze’ on wholesale customers, including itself, since July.
This sprouted from Telstra BigPond’s dramatic price cuts to its retail broadband plans without making appropriate price cuts for its wholesale customers.
Accusations of Telstra’s unfair treatment of wholesale customers have persisted for many years with ISPs such as iiNet and iPrimus publicly voicing concerns over Telstra’s monolopy on the market.
While the issue wasn’t new to people following the ISP market, the public could be unclear about why smaller ISPs were up in arms about Telstra, Hackett said in his blog post.
“Where this is mentioned, it can be frequently misunderstood by consumers to mean that providers are crying poor’ or ‘not trying hard enough’ – that it’s nothing but an exercise in sour grapes,” Hackett said. “It is none of those things.”
He said while consumers may view cuts to BigPond plans pricing as a good thing, Telstra was killing competition in places where it owns the only ADSL2+ infrastructure available by not lowering wholesale access prices as well.
“This means, specifically, that they are offering higher pricing – above that of BigPond – outside competitive areas, contrasted with far more competitive pricing and others than BigPond in competitive geographic areas,” Hackett said.
“… The issue here isn’t a moral one, or a question of providers such as Internode ‘not trying hard enough’ or ‘not negotiating well enough’.”
“It is also important not to confuse this situation with a slanging match over which competitive providers have built more of their own ADSL2+ DSLAM deployments.”
Hackett also highlighted the importance of the National Broadband Network (NBN) remaining a wholesale service provider. He said the permanent solution to Telstra’s stranglehold on the ISP industry was for it to be structurally separated.
This was part of the Federal Government’s Telecommunications Reforms bill which has been put on the backburner since this year’s election.
“It remains very disappointing one major side of politics has failed in its promise to force this outcome and the other side of politics claims [despite this obvious evidence to the contrary] that this separation is not even necessary because the current system ‘works’,” Hackett said. "No, it doesn’t. The current system is badly broken. And consumers are the losers."
Early this week, a Telstra wholesale spokesperson refused to discuss Internode’s claims and declined to engage in a “public battle” with the South Australian ISP on private negotiations between the company and its wholesale ISP customers.