iiNet has rejected Telstra's claims it is not to blame for the closure of its Canberra exchange and subsequent disconnection of 42 customers from rival ISPs.

Telstra will close the 30 year-old sub-exchange following a lease expiration and reopen an upgraded exchange with new ADSL2+ capabilities. Six ISPs, including iiNet, that subscribe to Telstra Wholesale (TW) will be cut off as the copper loop linking the old box to the Deakin exchange is ripped out.

Spokesman for the telco David Luff said affected ISPs will need to pay their way into the exchange because Telstra does not have rack space available.

“TW customers have two general alternatives; Spend the money to upgrade the external interconnect and provide ULL (Unbundled Local Loop) and SS (Spectrum Sharing) services from the new sub-exchange [or] talk with their TW account manager about the possibility of migrating their ULLs and SSS back to Telstra resale products,” Luff told Computerworld.

Telstra is trying to distract from the real issue of anti-competitive conduct with a smoke screen commentary about new ADSL2+ — which we already provide, but which this action will destroy

iiNet chief regulatory officer Stephen Dalby

“However, because there is such a small number of services involved it may mean that it isn’t economic for them to [upgrade].

“We reserve our right to upgrade and improve the network, although these sort of upgrades where ULL and SS services are no longer available are rare,” he said.

Luff said the upgrade was taken only as an opportunity to provide faster ADSL services to the area.

iiNet chief regulatory office Stephen Dalby said the move was a gossamer overlaying motives to cut out competitors.

“Telstra is trying to distract from the real issue of anti-competitive conduct with a smoke screen commentary about new ADSL2+ — which we already provide, but which this action will destroy — and irrelevancies about leases expiring... so what? Are they saying the landlord determines their use of fibre?,” Dalby said in an e-mail interview.

“Our customers will be forced to relinquish their naked DSL services and be migrated off our network onto Telstra. Telstra insists that a phone line be a condition of a broadband service.

“This means that Telstra is turning back the clock for those customers. They are forced to pay more, they lose choice and their performance is reduced. Telstra is choosing to do this to our customers, they are not being forced.” he said.

Competitive Carriers’ Coalition executive director David Forman said Telstra is exploiting a regulatory loophole to cut out competitors.

“Telstra says anyone who cuts the copper for the NBN (National Broadband Network) will be mutilating the network. [The NBN operator] will have to show how they will carry forward cut services, but Telstra does not,” Forman said.

“We've known this is coming for a while; clauses started to appear in contracts that said they need only give 15 weeks notice before terminating services

“This is a story about customer, not competitors,” he said.

Forman has lobbied the Australian Competition and Consumer Commission (ACCC) to close what he says is a loophole that allows Telstra to lock-out competitors.

He said the migration of the exchange which will strand competitor DSLAM equipment should be seen as a “warning about the company’s true motive: to continue to bully competitors and stifle broadband competition in Australia”.