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Telstra May Escape Broadband Fines
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Australian News |
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THE competition watchdog is considering whether
to lift regulatory sanctions imposed on Telstra last year, in a move that
could allow the telco to escape fines of more than $300 million.
The Australian Competition & Consumer Commission issued a competition notice
to Telstra last March over its decision to cut retail prices for its
broadband internet service the previous month without offering a similar
discount to its wholesale customers.
The narrower margin between Telstra's retail and wholesale broadband
services meant Telstra wholesale customers were unable to on-sell services
to their retail customers at a commercial price. The notice allowed the ACCC
to seek court-ordered fines of $10 million per offence and an additional $1
million fine for every day the anti-competitive conduct continued. Telstra
has clocked up a potential $307 million in penalties, despite delivering a
series of price reductions to wholesale broadband customers last year.
After finally cutting its wholesale broadband prices to a level believed to
be sufficient to placate the regulator on January 1, Telstra requested the
notice be revoked.
The ACCC is now canvassing industry players to assess the effect of
Telstra's new pricing structure on broadband market competition and whether
Telstra was still engaged in anti-competitive conduct.
Revoking the notice would cap the fines that could be applied if the ACCC
took court action over the original anti-competitive conduct at the amount
accrued to that day.
"The process we're going through now will only relate to whether the
anti-competitive conduct has ceased, and if it has, then we would have no
reason to leave the competition notice in place," ACCC chairman Graeme
Samuel said.
The ACCC has yet to decide whether to take legal action over the original
anti-competitive conduct, but is expected to drop the issue entirely if
Telstra's wholesale customers indicate they are satisfied with the new
prices.
Mr Samuel also indicated that were any legal action to go ahead, any fine
imposed on Telstra was unlikely to approach $307 million. "That's a nominal
headline figure, the maximum penalty that could be imposed," he said.
A Telstra spokesman conceded the company might not have given sufficient
notice to the ACCC and wholesale customers of its plans to cut retail prices
last year, but maintained the margins for Telstra's wholesale competitors
were always sufficient.
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