The Australian Competition and Consumer Commission had issued the Competition Notice in April last year, saying it “had reason to believe Telstra’s wholesale and retail pricing was anti-competitive.
Had the regulator successfully pursues the action, Telstra would have been liable to fines of up to $3 million a day – or about $1 billion since the notice was issued.
The ACCC now says that in light of changed regulatory circumstances, further enforcement action was no longer warranted.
“In light of the changing regulatory circumstances, including the declaration of the Wholesale Line Rental service, it was not necessary to keep the notice in force,” the ACCC said in a statement.
“This decision followed consultation with industry about developments since the service was declared, and the ACCC also took into account some changed market circumstances that were reported in this consultation.”
Telstra welcomed the decision to abandon the action, which it called “ill-conceived and unfounded.” The company now wants Government to rein in the ACCC’s powers in the telecommunications industry, calling it a “rogue regulator.”
Telstra public policy and communications group managing director Phil Burgess said exposing Telstra shareholders to a $1 billion potential maximum penalty “was an example of the heavy-handed exercise of extraordinary powers given to the ACCC.”
Mr Burgess said there never were legitimate grounds for the ACCC to issue a competition notice against Telstra because the company had consulted the regulator before making changes to wholesale prices in December 2005.
“The problem here is pretty simple to describe,” Mr Burgess said. “The ACCC has special powers over Telstra that allow it to shoot first and ask questions later. That is not the way things should work in a democratic society.”
“The ACCC's addiction to intrusive regulation continues to damage Telstra, weaken the telecommunications industry, and stunt broadband investment for Australia's future,” he said.
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