ACCC Examining Telstra's Wholesale ADSL Program

ACCC Examining Telstra's Wholesale ADSL Program

Telstra is charging its wholesale customers more for ADSL connections than it is charging many of its own retail customers, but wholesalers are restricted from discussing the issue because of non-disclosure arrangements in their contracts.

ADSL is a form of broadband technology that allows existing phone lines to deliver bandwidth-intensive applications like video and audio casting at a lower cost than current services like ISDN or satellite.

Broadband technologies are considered critical to the evolution of the next generation of internet applications. While none will comment publicly on the matter because of the non-disclosure agreement, it is believed several wholesalers have lodged complaints with the Australian Competition and Consumer Commission. The ACCC has confirmed that it is examining Telstra's wholesale ADSL service.

Retail customers can get ADSL for as little as $73 a month if they are existing Telstra customers under the company's Blast Off package, or $78 under its Freedom Standard Package.

However, The Industry Standard has learnt that wholesalers are being charged more than $80 per service.

The cheapest rate for non-Telstra retail customers is $89.50 a month, higher than the whole rate.

ADSL is not a "declared" service and is therefore not regulated, unlike access to the copper wires necessary for the service and which are regulated.

Michael Cosgrove, ACCC's general manager, telecommunications, said there was nothing illegal about the practice of charging more for wholesale than retail; however, he said it would certainly be the sort of matter the ACCC would look into, to determine if anti-competitive behaviour was occurring.

Asked if the ACCC had been approached about the pricing, he said "we are looking at various matters with regards to both pricing and non-pricing aspects of Telstra's wholesale ADSL business".

Currently,it is believed about 10 per cent of exchanges in Australia are equipped for ADSL. Telstra began its rollout in August 2000, and had about 70 exchanges converted by the new year. The pace has accelerated since Christmas, however.

Now, project insiders say about 370 exchanges out of about 3,300 nationally have been equipped for the broadband technology, the vast majority in the Sydney and Melbourne metropolitan centres, although Brisbane has also seen some activity. Likewise, there has been some activity in Tasmania as part of the Intelligent Island project, and there is some activity also in rural Queensland and Canberra.

Telstra's critics believe the company has a vested interest in slowing the rollout because it has revenue streams from ISDN and second phone lines to protect. ADSL would allow simultaneous internet access and voice access over the one wire, effectively ending the need for a second line. Its price performance is also significantly cheaper than ISDN.

Telecommunications analyst Paul Budde said the idea that Telstra was trying to stymie ADSL take-up was widely accepted in the industry.

(Telstra officials have not responded at the time of publication. We will report their response in an update of the story once we receive it.)*Andrew Birmingham is editorial director for The Industry Standard.

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