Telstra inclined to cop $4m ACCC fine
LUCY BATTERSBY :The Age
May 27, 2010
TELSTRA says it should be fined about $4 million for mistakenly excluding competitors' broadband servers from telephone exchanges over two years, instead of the $40 million sought by the competition watchdog.
Telstra argues that poor supervision rather than a deliberate corporate policy allowed Telstra Wholesale staff to reject applications from competitors who wanted to install ADSL 2+ broadband equipment in Telstra exchanges, even though there was space for the equipment.
''The contraventions were not deliberately anti-competitive and did not involve any of Telstra's senior management,'' Telstra's lawyers said in a closing submission to a case before the Federal Court in Melbourne.
The company admitted it had no review process for allocating space inside exchanges, and said this was to blame rather than the board, managers or corporate culture.
The Australian Competition and Consumer Commission claims Telstra indulged in anti-competitive behaviour when it rejected 27 applications from rivals at seven exchanges between January 2006 and February 2008, and has asked Justice John Middleton to set a fine for Telstra.
Telstra admits the mistakes but rejects the ACCC's accusation that it had a ''reckless regard for its [legal] obligations'', pointing out the small number of rejections, 27 out of 5246 applications, and random location of rejections - in Perth, Melbourne, Adelaide and Queensland.
''If there were a culture of the kind suggested by the ACCC, it would have resulted in contraventions on many more than 0.51 per cent of the relevant occasions,'' Telstra's lawyers said.
The ACCC has asked Justice Middleton to fine Telstra $40 million, or a discounted $34 million to account for Telstra's co-operative behaviour. The highest fine ever handed out for anti-competitive behaviour was Visy's $36 million penalty in 2007.
The competition watchdog slammed Telstra's training program in its final submission to the court last week, saying staff received no training in the company's access obligations under the Telecommunications Act and Trade Practices Act and were not supervised.
''The ACCC's contention, that low-level employees, without any legal training, should have sat down and read a copy of the TPA or the Telco Act, is unrealistic,'' Telstra responded yesterday. Telstra also argued there was no ''discernible impact on competition at any level'' caused by the employee's mistakes.
It asked for a maximum fine of $10 million, being the maximum fine for a single breach of the act, but argued that Telstra's co-operation and clean record in competition compliance warranted a fine of $3 million to $5 million.
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