Telstra has confirmed it will challenge the powers of the Australian Competition and Consumer Commission in the High Court in an effort to provide a new broadband service in Australia at a fair price.
The telco says it has asked the High Court to ensure that laws governing competition in the telecommunications industry comply with a Constitutional right guaranteed to all Australians.
ACCC says, while it recognises Telstra’s right to go to the High Court, the move will most likely be unsuccessful. Telstra says the legal action stems from a decision by the ACCC to reduce wholesale broadband prices without taking into account how Telstra’s costs for delivering services – such as for copper, fuel, labour and vehicles – have increased.
“The ACCC has set wholesale broadband prices at record new lows that are far beneath the company’s actual costs, meaning the subsidies funded by Telstra’s shareholders will have to rise yet again,” says Phil Burgess, group MD, public policy at Telstra.
“Telstra has a legal and ethical duty to challenge this in the High Court, because the Australian Constitution guarantees every citizen the right to fair compensation when their property is compulsorily acquired, as is
happening in this case,” he says.
Telstra says the ACCC price decisions are made using laws that are invalid because they fail to comply with a clause of the Constitution, which guarantees just compensation when property is compulsorily acquired. It’s not clear what property is involved.
According to an ACCC spokesman, the action will not affect any relationship it has with Telstra.
“Telstra is exercising its legal right to mount a challenge in the High Court,” the spokesman told CDN. “The ACCC will continue to administer the law given to it by the Parliament as it currently stands and work with Telstra as it would with any other company.”
He said that in three previous telecommunications challenges, the ACCC position had been upheld.
Comms and IT Minister Helen Coonan said it was difficult to comment on Telstra’s prospects without having evaluated how the case was framed. “However, the regulatory legislation does often affect the interests of regulated bodies,” Coonan said. “While acknowledging these competing interests, the objective of telecommunications regulation is to deliver a competitive sector where consumers and small businesses can choose from more than just one incumbent provider.
“At the end of the day this is a continuation of Telstra’s argument with the ACCC about the methodology and pricing for declared services.”
Coonan said Australia’s telecommunications experience was broadly consistent with international experience. “Access prices are established to provide fair and reasonable terms. Competitors do not access Telstra’s network without paying for it,” she said.