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Telstra's Bark Gets Some Teeth |
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Written by Adam Gosling
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Thursday, 05 April 2007 |
A Federal Court has ruled the ACCC was acting illegally when it issued
a complaint notice to Telstra over its wholesale pricing. The ACCC may
have dropped the notice last month, but now Telstra has the court on
side.
The win in Justice Annabelle Bennett's court has led to a renewed
attack on the regulator with Tesltra spokesperson Rod Bluem calling the
ACCC "a rogue regulator acting illegally".
The company in continuing its calls for the ACCC's powers to be
overhauled after Justice Bennett quashed the notice saying the ACCC had
not treated Telstra fairly.
"Competition notices impose substantial costs on Telstra, damaging its
brand and reputation. During the course of this case it became clear
the ACCC sees them as a relatively cheap and simple way it can bully a
company into submission," said Telstra's Director of Regulatory Affairs, Tony Warren.
"The judgement follows the ACCC's withdrawal of the competition notice
last month because it couldn't support its allegations against Telstra,
despite using its coercive information-gathering powers on ten
occasions over 16 months," Dr Warren said.
"The Government should recognise the lesson from this judgement, and
the ACCC should adhere to its obligations to afford procedural fairness
in the exercise of its duties.
"When subject to an unfair or improper regulatory attack, Telstra will
continue to use appropriate avenues to protect its rights and pursue
the interests of shareholders," Dr Warren said.
The wholesale line access charges are a key determinant in retail
pricing for ISPs that do not own their own infrastructure. Telstra
resellers rely on a margin between Tesltra's charges to them and the
competitive price Telstra's retail arm BigPond charges in the
price-sensitive consumer market.
Telstra believes the ACCC was goaded into action against it by
competing telco SingTel Optus which had used the Competition Notice as
an opportunity to take legal action against Telstra.
Telstra first told the ACCC about the price increases in the prices it
charges competitors more than a month before the ACCC raised concerns
regarding the impacts on competition of the two plan increases.
The ACCC issued the carrier with a Consultation Notice and given until
January 27 to provide a written submission in response before issuing a
separate competition notice which raised different concerns in
mid-April 2006.
By May first Telstra launched a Federal Court Challenge which was heard
in August last year. The ACCC revoked the competition notice in early
March.
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