OzHub, the Macquarie Telecom-led cloud computing alliance, has come down firmly on the side of Optus over the copyright controversy surrounding Optus TV Now, warning that any moves to change the law "risk branding Australia a global luddite state."
Optus has initiated legal action against Telstra over its December 2005 increase in wholesale line rental prices.
The move follows the ACCC issuing a Competition Notice against Telstra on 12 April - an official finding by the regulator that it believes the line rental price increase is anticompetitive.
According to the ACC, that move allows third parties to take action to seek to recover loss or damage for certain anti-competitive conduct that occurs while the notice is in force. Optus, however, is seeking damages which will include the excess amounts it has been forced to pay to Telstra since the new price came into effect and an order that Telstra reverse the price increase in the future.
Paul Fletcher, Optus' director of corporate and regulatory affairs, said Telstra was trying to erode a key principle of telecommunications competition - the rule that a competitor like Optus can combine its own long distance services with resold Telstra line rental to deliver a complete package to customers.
"In December last year, Telstra increased its wholesale line rental prices from $26.95 (GST inclusive) to $30.36 (GST inclusive), but no changes were made to its most popular retail line rental plans. The monthly line rental under Telstra's HomeLine Complete package remains at $26.95," Fletcher said.
"This produces the absurd result that Optus is forced to pay Telstra a wholesale price which is $3.41 more than the price at which Telstra sells the very same product in the retail market. This is blatantly anticompetitive."
Optus is suing Telstra for breaches of Section 46 and Part XIB of the Trade Practices Act. These sections prohibit a company with a substantial degree of market power from taking advantage of that market power to lessen competition, eliminate or substantially damage a competitor, or deter a competitor from engaging in competitive conduct. The case will be heard by the Federal Court over coming months.
Telstra has already rebutted the competition notice claiming that its wholesale line rental price is "fair and reasonable" and claiming that "The comparable retail plan to Home Access is HomeLine Part - which Telstra increased by $5 per month to $31.95 per month (GST included) shortly before it increased wholesale Home Access by $3.10."
It argues that ""When a wholesale customer uses a basic access service like Home Access to provide its own value-added services, the access charge is the only guaranteed income Telstra recovers... [So] it is only fair to Telstra's other customers and its shareholders that wholesale customers make an appropriate contribution to the maintenance of the network given they are making profits from providing services on the Telstra network.
David Frost
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