Telstra's current price control arrangements have been put under the microscope at a public hearing held by the Australian Competition and Consumer Commission in Perth last week.
Telstra's current price control arrangements have been put under the microscope at a public hearing held by the Australian Competition and Consumer Commission in Perth last week.
The meeting also provided wholesale telecommunications provider Chime Communications, a wholly owned subsidiary of iiNet, with an opportunity to raise objections regarding Telstra’s current corporate behaviour towards competitors.
Current price control arrangements, including line rentals and call costs, which are due to expire on June 30 2005, are currently under review with the ACCC holding public hearings in every State and Territory.
The ACCC will report to Federal Communications Minister Helen Coonan by January 31 2005.
The Perth hearing, which was attended by four people other than Telstra, the ACCC and WA Business News, came after the ACCC last week said Telstra’s monthly line sharing service fee of $15 was too high and unlikely to encourage competitors to invest in their own infrastructure to provide broadband.
The ACCC instead proposed the fee be set at between $7 and $9.
Chime Communications CEO Stephen Dalby said wholesale customers in the State remained frustrated by what they described as Telstra’s anti-competitive behaviour.
“I don’t think it is good to allow Telstra to have any more market power than they already have,” Mr Dalby told the hearing.
“There are a number of weapons of mass destruction that Telstra is using to keep competitors out of the market.”
Mr Dalby said one such weapon was the placement of an increasing number of hurdles in the way of potential competitors, refusing to negotiate and adding hidden charges.
“WMD two is, if we resell Telstra infrastructure instead of building our own, they make it really hard for us to value-add. WMD three is to encourage people to move off dial-up,” he said.
Mr Dalby said Telstra did that through its retail broadband product and the “spectre of timed local calls”. Telstra’s “arsenal” also included “some fairly heavy propaganda”, he said, including advertising budgets, media relations and the pressure to keep wholesale confidentiality agreements.
Telstra spokesman Andrew Gaspar responded to Mr Dalby’s comments saying the telco giant acted fairly and competitively at both a wholesale and retail level.
“Telstra is required by law to provide its competitors with access to its copper network at prices which are set by the regulator,” he said.
“We are a heavily regulated industry, monitored by the ACCC and the Australian Communications Authority and scrutineered by Federal Parliament and the media and we adhere to all regulatory requirements.
“At the same time, we must be commercially astute in this extremely competitive environment. It would not be in our interests to ignore wholesale customers.
“We also have confidentiality around wholesale agreements because our wholesale customers want us to keep their business information confidential.”
