ACCC attacks broadband pricing

Australia's competition watchdog today criticised Telstra's handling of broadband Internet price reductions.

The Australian Competition and Consumer Commission (ACCC) is investigating whether changes to Telstra's broadband charges, which leave the retail rate only 20 cents above the wholesale rate, are anticompetitive.

ACCC chairman Graeme Samuel said the commission was acting quickly on the matter and hoped to make a decision in a matter of days not months.

"You've got to act very quickly ... If there is damage being done - and let me stress if there is damage being done - then every day that passes just exacerbates the damage and we need to deal with that as fast as we can," he said at the Australian Telecommunications Users Group conference.

"This is not a month-by-month proposition it is a day-by-day proposition."

Telstra came under fire after it undercut its wholesale customers with price reductions for its retail customer base.

Telstra was quickly forced to lower its wholesale prices as well after the ACCC intervened, but Internet service providers still believe Telstra is pricing them out of the market.

Samuel warned the ACCC will go as far as issuing an injunction against Telstra which could lead to multimillion dollar fines.

He said initial analysis of the prices indicated that Telstra's pricing conduct would be a "price squeeze" on its competitors.

The ACCC's tough stance, Samuel said, sends a warning across the entire industry.

"If you are going to make major changes to your service offerings that have the potential to have an anticompetitive impact - you need to engage in dialogue with the ACCC," he said.

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