ISPs and Telstra ULLS supply dispute continues

Dispute over unconditioned local loop service

Telstra is in dispute with six different ISPs, the Australian Competition and Consumer Commission announced in a recent statement. The ACCC received separate notifications from the ISPs under Part XIC of the Trade Practices Act 1974.

The disputes relate to Telstra's supply of unconditioned local loop service (ULLS) and the monthly rental, connection and disconnection fees Telstra has charged the ISPs for the supply of the ULLS beyond 30 June.

Primus Telecommunications, Optus, XYZed, Request Broadband, PowerTel and iiNet through its wholly-owned subsidiary Chime Communications have all entered a dispute process that may take more than two years to resolve.

"The ACCC has been moderating those types of access disputes between Telstra and various ISPs since 1999... and this process is not efficient", said iiNet chief regulating officer Steve Dalby. "It is a way for Telstra to put the brakes on competition."

John Horan, a spokesperson for Primus Communications, said the company had been in dispute with Telstra since 2004-05 about the ULLS issue. "It is clear that none of us [ISPs in the dispute] have been able to reach an agreement with Telstra and that is quite typical", said Horan.

Parties refer a dispute to the ACCC when they cannot resolve it through private negotiations, mediation or conciliation. The ACCC does not have the power to set prices.

"Industry participants have charged Telstra with gaming the regime, by refusing to genuinely negotiate and seeking to draw matters out through these ACCC regulatory proceedings", said Horan.

Arbitration by the ACCC would be considered as a final solution for the parties in dispute. "Telstra uses the arbitration process to bring about pricing uncertainty as a means to deter competition and delay competitive investment plans", said Horan.

Back in January 2008, the ACCC published its final determination regarding Primus' dispute with Telstra over ULLS pricing but this determination has now expired. Primus is back in negotiations with Telstra and so are other ISPs.

The January ULLS determination specified a monthly rental charge of $14.30 per service per month in metropolitan band 2 for 2007/2008.

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