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Australia Starts Antitrust Case Against Telstra
By Lydal McFarland
The Wall Street Journal
Monday, April 20, 2009

Australian regulators started legal proceedings against Telstra Corp. for allegedly refusing rivals access to key parts of its network.

The Australian Competition and Consumer Commission said the telecommunications company didn't allow rivals wanting to provide voice and broadband services access to its equipment.

Telstra indicated it will defend the action and, in the latest development in a long-running feud with the regulator, accused the ACCC of attempting to force more regulations on the group.

The news comes amid continued uncertainty about the outcome of the government's national broadband network bidding process, which is likely to see one of Telstra's rivals given the green light to build a multibillion dollar high-speed fiber network across the nation after Telstra was excluded from the process last year.  The outcome the auction is likely to be announced by next month.

The watchdog says Telstra refused access at seven of its key metropolitan exchanges after it said they were "capped," and that there was no capacity on main distribution frames for rivals to interconnect their equipment to Telstra's main copper network, which connects to homes.

The ACCC alleged that Telstra has breached the Trades Practices Act and the Telecommunications Act by declining access at the seven exchanges, and is seeking declarations, unspecified financial penalties and injunctions against the group.

Telstra blasted the move as "a transparent attempt to pave the way for further legislative shackles on Telstra."

"The ACCC is suing us for something we proactively and voluntarily reviewed and fixed a year ago," David Quilty, Telstra's communications head, said.

David Foreman, executive director of the Competitive Carriers' Coalition, a group of eight of Telstra's smaller rivals, welcomed the ACCC move to take Telstra to court.

"In some cases, Telstra has kept competitors out of exchanges for years, which has stopped consumers from being given the choice of competitive prices and services," Mr. Foreman said.

The matter has been set for a directions hearing in federal court in Melbourne April 17, the ACCC said.

Telstra is also on the hunt for a new chief executive, after current CEO Solomon Trujillo announced his plans to step down by the end of June.

David Rogers contributed to this article.  Write to Lyndal McFarland at lyndal.mcfarland@dowjones.com

http://online.wsj.com/article/SB123744513865582041.html