ACCC's approach is "bugger the bush" says Telstra

Stuart Corner
Friday, 18 May 2007 13:19

IT Policy - Regulation

In an extraordinary response to the Australian Competition Tribunal's decision  to confirm the ACCC's rejection of Telstra's unconditioned local loop undertaking, Telstra has attacked the ACCC over the outcome, rather than the ACT.

And it has targeted its response where it will have the biggest political impact, threatening reduced investment and high prices for people living in rural Australia any laying the blame squarely at the door of the ACCC.

In language unprecedented in a corporate press release, Telstra said: "It is clear the ACCC's attitude is to look after affluent central city dwellers and bugger the bush."

According to Telstra, the ACT's decision will "aggravate the digital divide and magnify the problem by starving investment in regional telecoms infrastructure." Telstra said it was "considering the implications of this decision for the pricing of its services in both the city and the bush."

Telstra said it had "appealed to the Competition Tribunal in an effort to require the ACCC to adhere to the Government's policy of national averaged pricing for telecommunications, so that broadband prices are the same in the city as the bush."

However this policy is for retail services not necessarily the underlying services and in an earlier undertaking, also rejected by the ACCC Telstra had proposed de-averaged prices ranging from about $13 in CBDs to over $100 in rural areas. Shortly after the ACCC rejected it, in late December 2005, Telstra submitted a new undertaking with the $30 average price.

Telstra now warns Australia's "elected leaders" that they have a bigger problem on their hands. "The problem facing rural broadband users is grim, and it will deteriorate if the Government directs taxpayer-funded subsidies, called Broadband Connect, to duplicating services in big regional centres rather than extending broadband connections for the first time to unwired communities.