Outraged Telstra says court loss threatens future broadband investment

Alex Zaharov-Reutt
Thursday, 06 March 2008 11:38

IT Policy - Regulation

Telstra Corporation took the Commonwealth of Australia, the Australian Competition and Consumer Commission and 11 competing ISPs to court.

The 11 competitors are Primus Telecommunications Pty Ltd, Optus Networks Pty Ltd, Chime Communications Pty Ltd, XYZED Pty Ltd, Powertel Limited, Request Broadband Pty Ltd, NEC Australia Pty Ltd, Macquarie Telecom Pty Ltd, Amcom Pty Ltd, Adam Internet Pty Ltd and Agile Pty Ltd.

A media statement by the High Court of Australia, which notes that it is “not intended to be a substitute for the reasons of the High Court or to be used in any later consideration of the Court’s reasons”, states that the “telecommunications access regime set out in the Trade Practices Act (TPA) did not amount to an acquisition of Telstra’s property, the High Court of Australia held today.”

The High Court media statement says that: “Telstra asserted that contrary to section 51(xxxi) of the Constitution, which provides that Parliament has the power to make laws with respect to the acquisition of property on just terms, the access regime effected an acquisition other than on just terms of some of its local loops, the twisted pairs of copper or aluminium wire running between a local exchange and a consumer’s premises.”

The statement further explained the situation saying that: “Telstra has about 10.1 million local loops and about 5,120 local exchanges. The local loops are used for either unconditioned local loop services (ULLS), which have no equipment located along the loop, or line sharing services (LSS), which allows one supplier to use the low-frequency part of the spectrum for a voiceband service to an end user’s premises while another supplier uses the high-frequency non-voiceband part of the spectrum for high bandwidth services.”

When the ACCC (Australian Competition and Consumer Commission) made a series of decisions stating that Telstra must share ULLS and LSS services at set prices from AUD $14.30 per month for ULLS (unbundled local loop services) and from AUD $2.50 per month for LSS (line sharing services), Telstra took the ACCC and 11 competing Internet service providers to court.

The statement says that “Telstra began proceedings in the High Court against the Commonwealth, the ACCC and 11 other telecommunications service providers. Questions were reserved for consideration of the Court. The questions asked whether sections 152AL(3) or 152AR of the TPA in their application to ULLS and LSS were beyond the legislative competence of the Parliament by reason of section 51(xxxi).”

The High Court’s media statement then advised of the Court’s decision, saying that: “The Court unanimously dismissed Telstra’s case, holding that sections 152AL(3) and 152AR of the TPA were not invalid. The rights in Telstra’s assets were rights to use the assets in connection with the provision of telecommunications services but those rights were always subject to a statutory access regime which permitted other carriers to use its assets. Telstra had always owned and operated the assets within a regulatory regime by which other carriers have the right to connect their facilities to Telstra’s network and to obtain access to Telstra services.”