Ep 31 of 2010
August 2, 2010
Without any remorse last week, Telstra was found to be in breach of the Trade Practices act when it prevented its competitor's access to several telephone exchanges in most Australian states. This action prevented several ISPs from installing and connecting ADSL2 DSLAMS.
The Telco had claimed the main distribution frames in the exchanges were "capped" when there was still capacity available. This occurred, according to ACCC Chairman Graeme Samuel, at a time of critical broadband growth. He also said
"Telstra had both the incentive, and the ability, to prevent access seekers from deploying their own equipment"
The fine meted out by Justice Middleton was less than the $40 million penalty sought by the Australian Competition and Consumer Commission. Telstra was fined $26.5 million in total but Justice Middleton gave the carrier a 30 percent discount for its "cooperation, acceptance of responsibility and for implementing a compliance program." but he also found that Telstra had shown "no true remorse, nor an appreciation of the seriousness of the admitted contravention."
It's worth pointing out that the infringement occurred between 2006 and 2008, the time that the arrogant Sol Trujillo and the three amigos were at the helm of Australia's incumbent Telco. The court was particularly critical of Telstra's compliance policies, finding that "Telstra took no steps to develop a culture of compliance with its access obligations under the Trade Practices Act and the Telecommunications Act.
It's one thing to fine Telstra $18.55m, but as a percentage of revenue, it's nothing. Is this the reason why Telstra just brushed it off? Maybe the ACCC needs to aim higher and make penalties more relevant to the size and income earning capacity of companies .Telstra could make this back with customers exceeding their broadband cap in just one day
All this in the week that Telstra cut the 200Gb broadband plan to below wholesale. Competition amongst ISPs and carriers is necessary if market forces are to play a part in the pricing of goods and services. Telstra's aggressive action with its DSL price drop is surely aimed at hurting its competitors as it basically gave them the metaphorical bird.
We haven't heard the last of this in the media, blogs, forums and the courts. Is this yet another action motivated by the NBN rollout, or just the new regime stretching its post NBN agreement rollout?
This week on Tech Talk Radio
- Telstra's ups and downs continue with aggressive broadband offerings and an $18.55m fine
- the election banter ramps up with NBN becoming a major issue as voters prepare to go to the polls in just 3 weeks time and
- Adam Turner joins us to look at the latest offerings in 3D TV as well, he compares smartphones, including the iPhone 4