Australia’s internet service providers are gearing up for the next round of their ongoing battle with Telstra Corp over its internet data transfer pricing regime. Battle lines were drawn last week when Senator Richard Alston, the Federal Communications Minister, gave Telstra a public roasting over the charges it levies against other network operators. Telstra charges $0.13 per megabytre for data crossing from its network onto other networks, but does not pay for data it receives. Summing up industry indignation, Alston said: Why should Telstra be able to use its commercial muscle to charge for the provision of data, but refuse to pay for the receipt of data? He went on to throw out a challenge to industry watchdog, the Australian Competition and Consumer Commission (ACCC) to flex its regulatory muscle. Given the enormous international and domestic competitive opportunities which are up for grabs if Australia gets this right, he said, I expect that the ACCC will regard this issue as a high priority and will be scrutinizing the arrangements for any anti-competitive consequences. Telstra responded later that day with a Direct Settlement Credit Plan. Under the scheme, customers of Big Pond Direct – Telstra’s Internet wholesaling business – who download at least 5Gb of internet traffic per month are eligible for discounts ranging from $0.64/Mb to $3.22/Mb. The scheme was soon rejected by the ACCC. The ACCC has continually urged implementation of reciprocal interconnection arrangements as its preferred method for protecting the competitive process within the Internet industry, the Commission said on Thursday. Since then, phones have been running hot between Telstra, the ACCC and other industry players in a bid to resolve the issue. It really is genuinely a problem, said Tim Lloyd-George, Telstra’s group manager of corporate affairs, products and marketing. And although he admitted the Direct Settlement Credit Plan may not be the ultimate solution to the tariff dilemma, areas of possible negotiation are unclear. We’re not prepared to tweak it, he said. According to Lloyd-George, Telstra had challenged the ISPs to come up with their own models, but had received limited response. John Stuckey, chief executive of top-five ISP connect.com, claims that the ISP submitted a model that had been favorably reviewed by both Telstra and the ACCC. He had hoped Telstra’s scheme would incorporate elements of it. Obviously, we’re very disappointed, said Stuckey today, Because they’re the carrier doesn’t mean their traffic is worth more than anyone else’s. I think Telstra has really, really mucked up now. In protest, Stuckey now plans to back-bill Telstra for two years’ data, worth about $680,000. A ploy being considered by another industry member is to re-route its internet traffic through the US. Meanwhile, the ACCC remains hopeful that the dispute can be resolved. Confirming that the ACCC had held discussions with Telstra since last Thursday, director of public relations Lin Enright said: I think the parties are aware they need to move quickly. Just how quickly she would not say, but the timeframe would seem to be best measured in days rather than months. Should Telstra not supply an acceptable model, the ACCC may be forced to issue a Competition notice – the first ever served on a telecommunications player in Australia. Enright, however, would not discuss the Commission’s next step. We’ll look at that if we start having difficulties, she said. If industry sentiment can be trusted, that day may come sooner rather than later. As one industry source observed: Telstra’s not going to roll over and lie down on this one.
