Telstra’s ACCC challenge thrown out of High Court

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Telstra’s ACCC challenge thrown out of High Court

The High Court of Australia has thrown out Telstra’s challenge to overturn the Australian Competition and Consumer Commission's (ACCC) ability to set prices for access to its network.

Telstra launched a Constitutional challenge in January last year after the ACCC ruled that the telco should give rivals access to parts of its network for $3.20 a month.

In its challenge, Telstra targeted clause 51 (xxxi) of the Australian Constitution, which "guarantees just compensation when property is compulsorily acquired" as the telco believed it was being forced to sell access to its line sharing product below its costs.

Telstra claimed the ACCC's price-cutting intervention breached the Constitution because it amounted to the acquisition of Telstra shareholders' property without just compensation.

However, the High Court unanimously ruled that the telecommunications access regime set out in the Trade Practices Act did not amount to an acquisition of Telstra's property.

“It was not (and could not be) suggested that vesting those assets (and the associated liability to pay for the assets) in Telstra was other than a transfer of the assets to be held and used in accordance with and subject to the then regulatory regime contained in the 1991 Telecommunications Act. And it was not (and could not be) said that any question of acquisition of property was presented by the legislation which vested the assets in Telstra,” the High Court said in its judgment.

Telstra lamented the ruling as a “lost opportunity for more investment, more competition, more innovation and more choices in broadband."

"A victory today would have meant more investment, more infrastructure and more competition for Australia, all of which would have been good for Australian consumers and businesses," Telstra's group general counsel Will Irving said in a statement.

"Our competitors now have little reason to invest in their own networks, knowing instead they can simply resell Telstra services."

Telstra was ordered to pay the costs of the case.

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