ACCC flags limited ADSL price intervention

ISPs hit by a price squeeze on resold Telstra ADSL services could be in line for some relief after competition watchdog the ACCC indicated it could intervene to regulate wholesale access prices.

The Australian Competition and Consumer Commission distributed an open letter [PDF] to telecommunications companies yesterday.

"Broadly speaking, it has been claimed that the relative prices of Telstra's wholesale and retail ADSL services do not allow other service providers to profitably compete with Telstra in relevant retail markets," the ACCC's communications group general manager Michael Cosgrave said.

"The information currently available to the ACCC suggests that current complaints... warrant further consideration."

Internode and iiNet were among ISPs to have sought ACCC intervention on the issue, caused by drastic cuts made by Telstra to its retail broadband prices without proportional changes in the rates offered by Telstra to its wholesale customers.

At least one ISP - Internode - has accused Telstra of playing favourites on wholesale ADSL prices, a suggestion denied by Telstra.

But relief could be still a while away.

In its open letter, the ACCC suggested only that it could form an inquiry to determine whether or not a declaration governing wholesale xDSL services was required.

"The ACCC considers that there may now be a case for commencing an inquiry into the potential declaration of a wholesale ADSL access service," Cosgrave said.

Additionally, an inquiry would not lead to a national outcome.

"Any such inquiry would focus on geographic areas where effective DSLAM-based competition is unlikely to develop in the foreseeable future; the ACCC is not currently contemplating an inquiry that considers declaration on a national basis," Cosgrave said.

The last time the topic was raised was in 2008 when the ACCC decided that "a compelling case has not been made for declaring and regulating third party access to a wholesale xDSL service".

It appeared ISPs that sought faster or more substantive action would have to keep negotiating with Telstra Wholesale or consider their own legal options.

An Internode spokesman told iTnews it was still in discussions with Telstra.

A Telstra spokesman was also contacted for comment.