ISPs consider complaint against Telstra for alleged price squeezing

9 Jul 2010

Australian ISPs Internode, iiNet and Optus are all believed to be considering lodging complaints with the Australian Competition and Consumer Commission (ACCC) over alleged ‘price squeezing’ by Telstra. Following Telstra’s revamp of its retail DSL pricing, the alternative operators say there are some Telstra retail price points which are below Telstra’s wholesale price points, making it very difficult for them to compete with Telstra. Internode carrier relations manager John Lindsay said the alleged price squeeze was like ‘2004 all over again’, when Telstra began retailing DSL services for less than the wholesale price. Meanwhile iiNet chief regulatory officer Steve Dalby said the company was ‘starting to see a price squeeze at the moment with Telstra’s new DSL pricing plans, which are lower than wholesale pricing’. He said iiNet, with Internode’s help, was in the process of lodging a complaint with the ACCC. Optus so far has said only ‘watch this space’ when asked whether it would be taking action against Telstra.

Telstra has responded to the claims, saying in a statement that its Wholesale division regularly reviewed its prices and that direct comparison of wholesale and retail prices was difficult. ‘Comparing the wholesale price for [Telstra Wholesale] DSL — which is an input into an overall broadband offer — to the Telstra Retail price, is like comparing apples and oranges. They are two different products,’ the statement said.