National broadband company Internode has called on the ACCC (Australian Competition and Consumer Commission) to force Telstra to end the “price squeeze” caused by its anti-competitive broadband pricing.

In a letter to ACCC chairman Graham Samuel sent by its law firm Herbert Geer, Internode accuses Telstra of engaging in “anti-competitive conduct” in breach of section151AK of the Trade Practices Act 1974. Internode also calls on the ACCC to urgently issue a Competition Notice under Part XIB of the Act.

“Telstra is taking advantage of its substantial degree of power in the market for wholesale broadband services with the likely effect of substantially lessening competition in that market and also in the market for retail broadband services,” says Internode’s letter.

“This anti-competitive conduct will have most effect in the large number of exchange service areas (ESAs) without competitive infrastructure.”

Internode General Manager Regulatory and Corporate Affairs John Lindsay said Telstra’s “price squeeze” required urgent action by the ACCC. ‘“Telstra has recently lowered its retail prices on at least three major BigPond ADSL2+ plans, without making appropriate changes to the underlying access prices to deliver the same services via Telstra Wholesale,” he said.

“This means that BigPond’s retail cost is now substantially below the wholesale cost of these plans. In turn, that means matching those BigPond ADSL2+ prices through the Telstra Wholesale access path would send any provider broke.

“As the monopoly provider of ADSL2+ services across as much as half of the entire Australian population today, Telstra has substantial market power. This means that when it engages in such a 'price squeeze', it is consumers who ultimately suffer through a lack of competitive retail choices in the market.”

Internode’s letter warns that if Telstra’s price squeeze remains in place, Telstra will become the monopoly ADSL2+ provider to an overwhelming number of exchange service areas (ESAs) across Australia and all customers on RIMs (Remote Integrated Multiplexers).

“Telstra has reported that it wholesales 1.691 million DSL ports to its competitors,” notes Internode’s letter. “Unless swiftly dealt with via a Competition Notice, it is likely that Telstra’s anti-competitive conduct will result in many of the end-users serviced via these ports churning to Telstra, with the effect of substantially lessening competition in ESAs where there are no competitive DSLAMs.

“If Telstra is able to offer a product at price squeeze rates and lock customers in to long term supply arrangements, an increasing number of areas and a great number of consumers will be deprived of the choice of a competitive service provider.”

Internode: www.Internode.on.net

Internode is a first tier IP carrier committed to using broadband technology to redefine the national telecommunications environment. The Australian-owned company is a trailblazer that delivers broadband services to individuals and businesses throughout Australia. Follow Internode online at www.internode.on.net/about/follow_us_online.

Internode PR for media assistance: Impress Media Australia www.impress.com.au

Call John Harris on (08) 8431 4000 or email jharris@impress.com.au