Telstra does broadband backflip

Telstra BigPond has bowed to pressure from the ACCC and competing ISPs, announcing wholesale broadband price reductions of up to 40 percent, allowing other players to compete on a more level playing field.

Under the new plan, wholesale customers are being offered two alternatives; a 'protected rates' package which offers wholesale customers a 40 percent discount off retail prices across all plans, or a 'growth option' that offers price reductions on higher-speed plans.

In mid-March, the ACCC issued the big telco with a competition notice, claiming that it was engaged in anti-competitive conduct.

Without a reduction in wholesale broadband pricing, Telstra could have been faced with the prospect of court action or multi-million dollar fines.

In a statement issued on Wednesday, Bruce Akhurst, group MD, Telstra Wholesale, said the new price options would permit lower retail prices to remain in the market and help 'distracting and expensive regulatory intervention.'

'The protected rates package specifically addresses industry concerns about the available margin between retail and wholesale prices, gives wholesalers the security of knowing retail and wholesale prices will move in tandem,' he said. He claimed the growth option would give competing ISPs an incentive to promote faster broadband speeds.