Adelaide based national broadband company Internode has called on the ACCC (Australian Competition and Consumer Commission) to end Telstra’s “price squeeze” due to its anti-competitive broadband pricing.
Internode sent ACCC chairman Graham Samuel a letter through its law firm Herbert Geer. In its letter Internode accuses Telstra of engaging in “anti-competitive conduct” in breach of section151AK of the Trade Practices Act 1974. Internode also calls on the ACCC to urgently issue a Competition Notice under Part XIB of the Act.
“Telstra is taking advantage of its substantial degree of power in the market for wholesale broadband services with the likely effect of substantially lessening competition in that market and also in the market for retail broadband services,” says Internode’s letter.
“This anti-competitive conduct will have most effect in the large number of exchange service areas (ESAs) without competitive infrastructure.”
Internode General Manager Regulatory and Corporate Affairs John Lindsay said Telstra’s “price squeeze” required urgent action by the ACCC.
“Telstra has recently lowered its retail prices on at least three major BigPond ADSL2+ plans, without making appropriate changes to the underlying access prices to deliver the same services via Telstra Wholesale,” he said.
“This means that BigPond’s retail cost is now substantially below the wholesale cost of these plans. In turn, that means matching those BigPond ADSL2+ prices through the Telstra Wholesale access path would send any provider broke.
“As the monopoly provider of ADSL2+ services across as much as half of the entire Australian population today, Telstra has substantial market power. This means that when it engages in such a ‘price squeeze’, it is consumers who ultimately suffer through a lack of competitive retail choices in the market.”
“Telstra has reported that it wholesales 1.691 million DSL ports to its competitors,” notes Internode’s letter.
