"Telstra should be required to offer ADSL2+ as a wholesale product in those exchange areas where competitors have been denied access to install their own broadband network."
Bhatia said the government's view that "it was not currently necessary to regulate ADSL2+ services" was misinformed because it was not aware that Telstra had denied ISPs third party access to exchanges.
"That view was based on a critical misunderstanding [because] Telstra has denied competitors access to exchanges across Australia [which] they need access to deploy their own networks."
"This conduct by Telstra has stymied the development of facilities based competition, and the Government was not aware of this." Bhatia said.
Bhatia address the issue in a letter to Communications Minister Stephen Conroy.
Pentaq Technology CEO Raj Sharma said in an e-mail to Computerworld that ADSL access was stifled for political expediency.
"It is amazing that a partially state owned enterprise like Telstra has held back its services from the Australian public in the name of playing politics," Sharma said.
"Commercial reasons aside, Telstra showed blatant disregard for the users of ADSL and was busily meddling in political stoushes."
iiNet user Brian Moore told Computerworld expensive ADSL2+ will hit hardest the wallets of users who are unaware of alternative competitive broadband plans.
Ovum research director David Kennedy said Telstra's move indicates a better relationship with Labor than under the previous government.
"It signals new policy activism from the government [because] the previous government was content to allow the ACCC to manage issues around infrastructure access, and resisted attempts by Telstra to go over the ACCC's head," Kennedy said.
"For over a year, Telstra has refused to turn on ADSL2+ services outside the footprint of its competitors networks for fear that the ACCC would force it to provide access in areas where it held a monopoly."