Telstra ticked off over broadband competition ruck

AUS$6.5m rebate is enough says regulator

Australia's incumbent telco is to repay AUS$6.5m (£2.7m) to rival broadband operators over allegations of anti-competitive behaviour. The ruling by the Australian Competition and Consumer Commission (ACCC) brings to an end a year-long investigation that could have seen the telco shouldered with fines of around AUS$350m (£146m) had the book been well and truly thrown at Telstra.

In February last year Telstra cut the cost of its retail broadband service undercutting what it charged other operators for wholesale broadband. Rivals said this was unfair and an abuse of Telstra's dominant position. In March, the Australian Competition and Consumer Commission (ACCC) agreed that Telstra had engaged in anti-competitive conduct and slapped the company with a Competition Notice.

In a statement today the ACCC said: "Telstra has acknowledged that its pricing changes made in February 2004 for its retail broadband services may have adversely affected the competitive position of its wholesale broadband customers. In order to meet ACCC concerns, Telstra has offered its wholesale customers reduced wholesale pricing and rebates."

As well as the rebate, the ACCC has also secured a "safeguard mechanism to prevent the recurrence of similar conduct in the future". The regulator also appears happy with Telstra's price cuts for wholesale broadband over the last year - so much so, it does not propose to take any further action in relation to the Competition Notice.

In a statement ACCC Chairman, Mr Graeme Samuel, said: "Following the ACCC's investigation into Telstra's pricing of high speed internet services, Telstra has reduced its wholesale DSL pricing over a period of time with the latest reduction taking effect from 1 January 2005. In addition, Telstra has now agreed to rebate $6.5 million to its affected wholesale customers".

However, the ruling has been dissed for being too lenient by critics claims this is little more than ticking-off for the incumbent and will do little to improve the competitive landscape down under.

Bloomberg quotes a spokesman for Australia's Competitive Carriers' Coalition as saying: "It's a drop in the ocean for Telstra. There's no serious disincentive to prevent anti-competitive conduct." ®

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