Internode and iiNet accuse Telstra of price squeeze

Telecommunications giant Telstra has been accused of monopolising the ADSL2+ broadband market in locations where the only means of an internet wholesaler to provide the service is via Telstra Wholesale’s owned equipment.

Internode has filed a complaint to the Australian Competition and Consumer Commission (ACCC) stating that Telstra is offering its own retail customers a cheaper price for ADSL2+ than wholesalers who wish to provide the service to their customers.

Internode's carrier relations manager, John Lindsay, said: "It's simply not economically viable to sell retail products that are based on a wholesale input from Telstra where that cost is above the prevailing retail price."

After a decade of being arguably the least competitive of all Australian broadband providers, BigPond recently lowered their retail ADSL2+ prices in order to stay in touch with its competitors. However, BigPond did not subsequently alter its access prices for other ISPs to deliver the same ADSL2+ service via Telstra Wholesale ports.

Mr Lindsay added: "This means that their retail cost is now substantially below their wholesale cost on these plans. That, in turn, means that matching those BigPond ADSL2+ prices through the Telstra Wholesale access path would send any provider broke."

Internode is also representing iiNet in its claim, and is hoping the formal complaint causes the ACCC to issue a 'Competition Notice' under the Trade Practices Act. This notice would then force Telstra to lower its wholesale prices so that other providers could have a fair go at acquiring customers at telephone exchanges where it isn’t possible to put in their own DSLAM equipment.