Internode leads bid to remove ADSL2+ access barriers
Telstra recently announced that it will activate high-speed ADSL2+ broadband at more than 900 telephone exchanges for the purpose of retail sale. The protesting ISPs, which include iiNet, Internode, TSN Communications, and Westnet, allege this is on the basis of an apparent understanding that Telstra will not be obliged to offer equivalent services wholesale.
In a letter to ACCC chairman Graham Samuel, the phalanx of ISPs calls on the ACCC to issue an urgent Competition Notice under Part XIB of the Trade Practices Act 1974. It also urges the commission to re-examine declaring regulatory access to all DSL (Digital Subscriber Line) broadband services, especially in areas where competition through alternative broadband platforms is unviable.
Internode managing director Simon Hackett said he and other leading ISP executives were eager to meet with the ACCC to explain their concerns in detail. "This is a serious problem, both for the broadband sector and for Australian consumers and businesses," he said.
"Telstra clearly has a substantial amount of power in the market for wholesale broadband services. We believe that Telstra's decision not to offer wholesale access to ADSL2+ services will lead to a substantial lessening of competition."
"Telstra has aggressively marketed ADSL2+ broadband as superior to ADSL1 technology. By excluding competitors from wholesale access to its ADSL2+ services, Telstra can lure customers of other ISPs into two or three-year contracts. This substantial lessening of competition will clearly have an adverse impact on consumers, both in terms of price and the range of services available to them in the long term."
"For this reason, 10 erstwhile competitors have put their differences aside to urge the ACCC to start an investigation about issuing a Competition Notice."
If the ACCC has reason to believe that a telecommunications carrier or carriage service provider has engaged or is engaging in anti-competitive conduct, it may issue a Competition Notice under section 151AKA of the Trade Practices Act. This threatens penalties of as much as $10 million for each offence and a further $1 million for each day that a company is found to breach the anti-competition rules.
The nine-page ISPs' letter to the ACCC outlines various impediments to effective competition that arise from Telstra's monopoly control of the copper telephone line network. These include:
- Untenably high wholesale transmission pricing
This describes the "backhaul" cost of moving data from a regional telephone exchange to a capital city. Internode reports that charges from SA's second-largest town, Mt Gambier, where Telstra is the only backhaul provider, makes providing ADSL2+ services commercially unviable. However, Internode does provide ADSL2+ services in Whyalla, SA's third largest town, where a competitor provides backhaul services for one tenth the cost of a similar Telstra service.
- Capped exchanges
Telstra has announced a steadily increasing list of full - or "capped" - exchanges where it claims there is no space for other companies to install their own broadband equipment. The ISPs allege that Telstra will not consider solutions to this issue. They also state they have examples of exchanges that were not "full", despite Telstra's claims to the contrary.
- Delays for approval to access exchanges to install DSLAMs
Telstra's "serial queuing system" means companies can only access exchanges one at a time to construct or expand DSLAM (Digital Subscriber Line Access Multiplexer) equipment. It can take as long as two years for a competitor to access or upgrade ADSL2+ services in an exchange, whereas Telstra BigPond can upgrade its own ADSL2+ services in as little as 48 hours.
Mr. Hackett said the joint action by ISPs demonstrated the seriousness of the threat posed by Telstra's ADSL2+ access ban. "By retarding competition in the broadband sector, it would mean higher prices and a poorer choice of services for Australian consumers and businesses," he said.