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Telstra appeals competition commission ruling

Telstra appeals competition commission ruling

The Australian Competition and Consumer Commission (ACCC) has handed down a final determination in relation to Telstra's pricing of its Line Sharing Service. This decision by the ACCC specifies a LSS monthly charge of A$2.50 (US$2.17) per service, and follows a three-year access dispute between Telstra and Adam Internet over Telstra's proposed LSS rental charge of A$9 per service per month.

Both the ACCC (in December 2005) and the Australian Competition Tribunal (in June 2006) were not satisfied that Telstra's proposed LSS rental charge of A$9 per service per month was reasonable. Telstra has continued to require access seekers to pay A$9 per month during this period of arbitration. Line Sharing Service (LSS) is a service which allows an access seeker to use part of the spectrum on a PSTN line to provide a broadband service.

Telstra has already applied to the Federal Court (on 17 January 2008) for a judicial review of the ACCC's LSS final determinations for telecommunications companies Amcom, Adam Internet, Agile, Primus, Network Technology and TPG, and the ULLS final determination for Primus

The matter has been listed for a first directions hearing on 20 February in front of Justice Lindgren. Telstra's Media spokesman Jeremy Mitchell said, "We are going to court on this. It will be heard in February in the Federal Court. The ACCC have overreached its powers in determining this [the pricing of Telstra's LSS and ULLS]."

In early December 2007, Justice Lindgren heard Telstra's judicial review applications involving the ACCC's LSS final determinations issued to Primus, Request and Chime last year.

Commenting on Telstra's notice of its intent to appeal the ACCC ruling Adam Internet's chairman, Greg Hicks said, "I believe the appeal was already set up and waiting."

Nonetheless, Adam Internet has already moved to pass the savings from the LSS rental charge onto new customers. "We have already offered a price reduction of up to $50 on set up fees for new ADSL plans for our new customers," Hicks said in response to the ACCC decision.

In terms of savings for existing customers he believes they have already got a great deal. "Our broadband product launched at an aggressive price [in 2006], as we were expecting to negotiate a reasonable price when we signed on [with Telstra]."

"If Telstra win the appeal [in the Federal Court] we cannot go back [to our customers] and get more money from them to pay the additional money [for the Line Sharing Service (LLS)"

Hicks said the ACCC determination would also assist Adam Internet in freeing up funds for investment in enhanced customer care and additional network infrastructure.

The developments planned by Adam Internet include the installation of more AdamDirect exchanges and the release of new products such as video content, enhanced Voice Over Internet Protocol (VoIP) services, and mobile broadband packages.

"We are in the process of recouping the monies, but it's not ours until we win the appeal," Hicks said. "It's been an ongoing struggle. It's cost us an awful lot of money, and when you bring the High Court costs into it, it is in the millions of dollars."

"They [Telstra] are tying up and stalling the process. If a company isn't strong enough it won't survive the process."


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