ACCC considers Telstra/OzEmail monopoly threat

The consumer watchdog is closely examining the takeover and the potential impact it could have on competition in the Internet service provider market. Telstra's Big Pond and OzEmail are the number one and two players respectively in the Australian ISP market.

A spokesperson for the ACCC said there has been a "healthy response" to the issue from market participants and discussions are continuing.

Two meetings were held with Telstra last week and it is likely a meeting will soon take place with OzEmail, the spokesperson said.

A Telstra spokesman said he would not be surprised if the ACCC requested further meetings with the telco giant. "The ACCC said it was a complex issue for them . . . there is obviously a lot of opposition to it [and] all we can do is present our case," he said.

In response to reports that the takeover would see Telstra controlling up to 70 per cent of the ISP market, Telstra said the real figure for the combined market share would be 31 per cent. The spokesman also stressed that under the proposed deal OzEmail would operate as a wholly owned subsidiary with its own pricing models; backbone services would be supplied by current parent company UUNet.

OzEmail refused to comment on the takeover.

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