Australia's competition watchdog has taken Telstra to court, alleging that the operator has been keeping broadband ISPs competitors from connecting to its network.
Telstra had refused requests at seven key metropolitan exchanges, falsely claiming that these services were capped, the Australian Competition and Consumer Commission (ACCC)
Alleges.
In each case capacity could have been made available, it told the court. This is a breach of the Trade Practices Act and the Telecommunications Act, ACCC said. The regulator is seeking declarations, punitive penalties and injunctions.
Telstra group managing director David Quilty said the court action was a waste of court time and money. "The ACCC is suing us for something we proactively and voluntarily reviewed and fixed a year ago," he said.
"This case relates to a small number of inadvertent process issues. There was an issue and we fixed it - without the involvement of the ACCC. Since we fixed the problem a year ago, the ACCC has not once suggested it had problems with our new processes."
In early 2008, Telstra changed its process for determining whether an exchange is full, removing 24 from the list of full exchanges and downgrading a further 24 to "potentially capped", Quilty said. Originally, 76 exchanges were listed as full, but now less than 1% of exchanges are categorized that way, he added.
Telstra estimates that nearly 1.2 million ULL (unbundled local loop) and spectrum sharing services operating through Telstra exchanges, up from just 18,000 in 2003.
But iiNet chief regulatory officer Steve Dalby said the case is more evidence of Telstra's anti-competitive behavior. He said regulators should force Telstra to structurally separate its retail and wholesale divisions.
"Customers have been, and will continue to be, the losers with slower, more expensive and less broadband competition until full regulatory reform is undertaken and Telstra is broken up," Dalby said.
iiNet could identify numerous incidences where Telstra prevented the ISP from being able to provide cheaper or faster broadband services to its customers by falsely claiming exchanges were full, he added.
The first hearing will take place at the Federal Court in Melbourne on April 17.