The Queensland government has been forced to pay $17.3 million back to Telstra in rental overpayments after a judge found parts of the state's legislation invalid.
Telstra and the Queensland government have been engaged in a battle over rental payments for mobile towers situated on Crown land since 2012.
The problems arose after the state government introduced the Land Regulation 2009 Act, which prescribes rents, or methods of calculating rents, for leases over state land.
When the law came into effect in July 2010, it prescribed nine categories of leases - since expanded to 13 - one of which specifically dealt with communications sites such as telco towers.
The legislation stated that rent for leases within this category was a fixed-price $10,000 fee for rural areas and $15,000 for urban areas each year. The figures have risen by about 3.5 percent annually since 2010, currently sitting at $12,302 for rural areas and $18,453 for urban areas.
However, the state government used a different method - 6 percent of the land's valuation - to determine rental fees for other businesses.
This meant telcos usually ended up paying higher rents than other commercial entities.
Telstra - which has 488 leases for telco towers on Queensland government land, and 894 on private land - claimed the law discriminated against carriers by imposing higher costs on telcos than other businesses.
The Queensland government argued that the rent it charged telcos was equivalent to market rates in private land leases, and claimed it was allowed under the federal Telecommunications Act to make a distinct between carriers and businesses and charge telcos the higher rates.
Telstra claimed that had carriers been considered equal with other businesses, it would have only paid $3.2 million in the six years to June 2016, rather than the $33 million it was charged by the Queensland government.
The telco decided to stop paying the fees it had been prescribed under the legislation, and instead pay rent at the rate other businesses were charged. It also took the state government to court.
The change in fee payments prompted the state government to counter-claim for $12.5 million in rent it alleged Telstra owed.
Last October Justice Rangiah knocked back the state government's argument and said "price-gouging of this type" was "precisely the type of conduct" the Telecommunications Act was designed to prevent.
Rangiah found the state law unfairly discriminated against carriers, and said it would be more appropriate for telcos to be placed in the "business" category and charged rent based on 6 percent of the land valuation.
The judge also found the state government had failed to prove that the rates it had set for Telstra were reasonably comparable to private sector prices, and that the law denied carriers a right to appeal the rent they were charged.
As a result, in a ruling that went largely unnoticed in March this year, Rangiah found that the discriminatory sections of the Land Regulation Act were invalid.
He ruled that rents on all Telstra land leases in Queensland from July 1 2010 to June 30 this year should be treated under the 'business' category, meaning the total rent Telstra is liable for during that period is $4.1 million.
It meant the Queensland government would need to pay back $16.2 million in overpayments, plus $1.1 million in interest, to Telstra, as well as its costs from the long-running court battle.
The case officially wrapped up last month.
Telstra said it was pleased with the ruling. The state government did not return request for comment.