Internode accuses Telstra of wholesale price bias

Cost dispute escalates.

ISP Internode has accused Telstra of giving more favourable wholesale pricing and terms to service providers not rolling out competing DSLAM networks.

A Telstra spokesman refused to be drawn on the specific allegations.

"We are not interested in a public battle on what is a private and confidential negotiation," the spokesman said.

As many Australians tuned into an announcement by independent MP Bob Katter on the country's political future, Internode managing director Simon Hackett stepped up his campaign for Telstra to cut its wholesale port prices on the broadband forum Whirlpool.

Internode and at least two other ISPs lodged complaints with the competition watchdog last month that sought intervention to resolve the dispute.

Hackett speculated yesterday that variance in retail pricing among Telstra port resellers was "not about negotiating skill" differences between the various ISPs.

"What makes you think [Telstra Wholesale] aren't playing favourites in terms, conditions and/or timing?" Hackett said.

"There are lines here that I can't cross in public due to NDA's [non-disclosure agreements], but surely you're able to read between them a bit?

"Think about it. Consider that ISPs who choose to make massive investments in their own DSLAM infrastructure are likely to be considered differently by [Telstra Wholesale] to ISPs who don't do so.

"Our treatment should of course be identical, but alas we don't all live in that ideal world, do we?"

Internode and other ISPs were under pressure to either cut the price of resold Telstra services or see customers jump ship to BigPond.

"We fully appreciate that in this interim period (before the price squeeze is dealt with properly by Telstra Wholesale), we will lose some customers to BigPond," Hackett said.

"We're sad about that. But we're not so sad about it that we're prepared to go broke to avoid it happening, because if we go broke, then we can't help our customers in the long term either."

Hackett said Internode would revise its Telstra port-based plan prices "once Telstra Wholesale provided a commercially acceptable revision to their source costs".

"We've been promised a commercially acceptable offer by Telstra 'next week' for the last several weeks," Hackett said.

"I'm personally optimistic that one of these 'next weeks' soon will be the one where that actually happens."

He said it would take "about a month" for Internode to implement new prices once it had received an acceptable written offer from Telstra.

Telstra's spokesman said the company's wholesale division was in "negotiations with many... DSL customers."

"We are being flexible and commercial and doing the best we can to accommodate their requirements," the spokesman said.

"Broadband is a very competitive market and Telstra Wholesale is committed to making sure that its commercial offers are attractive to wholesale customers and competitive to the market."