The full letter to the ACCC can be viewed here.

An ACCC spokesperson refused to comment on the letter or whether the watchdog was considering taking action against Telstra.

Internode managing director, Simon Hackett, said the situation was a serious problem for the broadband sector as well as users. Internode has been in contact with the ACCC and expects to meet staff there next week to discuss the situation further, 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," he said in a statement. "By excluding competitors from wholesale access to its ADSL2+ services, Telstra can lure customer of other ISPs into two- or three-year contracts."

Netspace regulatory affairs manager, Ben Dunscombe, was hopeful that next week's meeting with the ACCC's head staff, including Graham Samuels and Michael Cosgrove, would trigger action.

"This is the clearest case yet where consumers will be ngatively impacted if there is no notice. We will end up with a two-tier broadband economy: those that can afford the extra costs per connection, and those who can't and are relegated to ADSL1+," he said.

The latest calls against Telstra follow years of wrangling between the telco giant and rival ISPs over wholesale broadband services. Back in March 2004, the ACCC slapped a competition notice on Telstra after it launched the first $29.95 ADSL retail plan in Australia. The decision was made after ISPs claimed the cost of ADSL wholesale access was actually higher than the retail pricing Telstra was advertising.

Under the conditions of a competition notice, the ACCC can threaten penalties of up to $1 million for each day a company behaves anti-competitively.