Competition watchdog to investigate Telstra’s internet fees

The Australian Competition and Consumer Commission is launching an enquiry into the prices Telstra charges its competitors for internet data.

It’s a move which could see an end to the high prices charged for internet access in regional Australia.

A spokesperson for the competition watchdog told SmartCompany the ACCC will shortly commence a declaration inquiry into the regulated transmission service.

“During this process, the ACCC will be examining the level of competition within transmission markets and will also consider price and price-related issues,” he said.

“Following this inquiry, the ACCC will make a final access determination that will set prices for regulated transmission routes.”

What this means is that the watchdog will be running a fine tooth comb through the prices charged by Telstra, the chief regulatory officer at iiNet, Steve Dalby, told SmartCompany.

“In a lot of areas there is only Telstra, and so that is why Telstra comes under the spotlight, and because there is no competition there is possibly room for anti-competitive behaviour,” he says.

“We are captive to Telstra’s wholesale back-haul charges in the country in particular, but in the metropolitan areas it is more competitive.”

Dalby says iiNet is concerned that in order to buy a wholesale broadband product off Telstra it is obliged to buy its transmission product as well.

“Telstra commercially forces this issue, which is anti-competitive, and the ACCC has allowed this,” he says.

iiNet also wants Telstra to be required to offer its services in regional Australia at the same rate that it is offered elsewhere in the country.

“We pay more for a short run to a regional town than we do to the US or Japan, it’s just ridiculous,” he says.

“If Telstra is still allowed to force this bundled approach on competitors in addition to behaving anti-competitively all that does is keep prices up and reduces the amount of added value that companies like ours can supply.”

Dalby says some companies like Optus don’t even go outside the metropolitan area as it is just not worthwhile.

“When there are fewer suppliers small businesses have no option with service quality low and prices high,” he says.

SmartCompany contacted Telstra but did not receive a response prior to publication.