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Telstra 'price squeeze': Hackett slams ACCC inaction

IT Industry - Strategy

Telstra's been squeezing prices to its wholesale customers for almost a year now -- and the national competition regulator's taken zero action in response, according to Internode managing director Simon Hackett.

After unveiling a substantial revamp of his company's broadband plans yesterday, Hackett posted a lengthy blog post detailing some of the background behind the changes. A number of customers have already begun debating online whether the new Internode plans which use Telstra's wholesale infrastructure actually represent better value for customers.

'Why have these changes happened?' asked Hackett. 'Since mid-2010, a powerful monopoly service supplier has been engaging in a 'price squeeze' that has been described in previous blog posts on this site.'

The Internode chief said during past price squeezes, the Australian Competition and Consumer Commission, which keeps a close eye on the wholesaler concerned, Telstra, had ultimatedly acted to remind the telco of its obligation to 'play nicely', with the result that 'positive and appropriate' changes had been made to wholesale access costs.

'Unfortunately, for this current price squeeze, no ACCC enforcement action has yet been undertaken and so (not surprisingly) the price squeeze remains in place (indeed, it has in fact become more intense in the last few months),' said Hackett.

Telstra and the ACCC have been invited to respond to Hackett's comments, but had not done so by the time of publication.