A Federal Court Judge has rejected an application by the Australian Competition and Consumer Commission to fine Telstra $40M for breaches of the Trades Practises Act. Instead he has fined them a record $18M.
The fine was handed out after the national carrier was accused of locking broadband competitors out of its telephone exchanges in Australia. The ACCC took action after complaints from competitors who had been told by Telstra executives that there was no room at Telstra exchanges for them to install equipment to service their own customers, when in fact there was.
Justice John Middleton said that Terlstra had contravened the Act and its licence on 27 occasions between July 2006 and April 2008.
Telstra was fined for “each occasion that it rejected requests by service providers to permit interconnections of their facilities with Telstra’s facilities”.
The Sydney Morning Herald said that Telstra argued in court that the exchanges were ”capped”, or had reached full capacity, by junior technicians working in the field, thus denying competitors access.
A list of capped exchanges was issued on the Telstra Wholesale website, but Telstra’s lawyers argued this was a mistake made by mid-level staff, and was not a systematic corporate decision to indulge in anti-competitive behaviour. It said this morning that no exchanges had been capped since senior staff became aware of the practice in April 2008.
”We acknowledge that mistakes were made and that a penalty should be paid – we accept the Court’s decision,” a spokeswoman said.
We accept the judgment which has been handed down. We will not be appealing.
Since these events occurred, Telstra has taken proactive steps to improve our processes in this area, and more generally, to improve service to our wholesale customers. We have learned a lot as a result of this process and like many changes at Telstra, we are endeavouring to improve our performance.
We cooperated with the ACCC on its investigation and implemented improved monitoring, processes and training. As a result, no new exchanges have been capped since April 2008.
