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Mallesons heads to High Court with Telstra

Mallesons heads to High Court with Telstra

MALLESONS STEPHEN JAQUES is acting for Telstra in its High Court challenge to the Australian Competition and Consumer Commission (ACCC) over the prices it has set for competitors to access…

MALLESONS STEPHEN JAQUES is acting for Telstra in its High Court challenge to the Australian Competition and Consumer Commission (ACCC) over the prices it has set for competitors to access Telstra’s network.

“We’re launching a High Court challenge to the validity of the telecommunications access specific part of the Trade Practices Act as it applies to our unbundled local loop … and our line-sharing service,” said Will Irving, group general counsel of Telstra. The unbundled local loop refers to the “last mile” of copper wire between local exchanges and the consumer.

The action was lodged on 24 January.

Irving said Telstra shareholders had been forced to hand over their “property” to Telstra’s competitors at prices set by the ACCC which are unfair. Telstra says this is limiting the investments they can make to upgrade the network.

“These prices don’t represent ‘just terms’ for compensation as guaranteed by the Australian Constitution,” he said. “It’s like the ACCC telling you that you’re required to rent a room in your house and then telling you to rent it out for $17.70 a month.”

As a result, Telstra will ask the High Court to rule that, in effect, the ACCC’s decision amounted to allowing competitors to acquire Telstra shareholders’ property without compensation on “just terms”, as guaranteed under section 51 (xxxi) of the Constitution.

Phil Burgess, Telstra’s Group Managing Director, Public Policy & Communications, said the “proximate” cause of the action was the ACCC’s interim determination just prior to Christmas last year to set the price to competitors for the line-sharing service (LSS) — which is essential to allow competitors to offer alternative broadband services — at $3.20.

He said this was a “ridiculously low” price and competitors could resell this for “around 10 times that amount” which “even the ACCC is having trouble justifying”.

“For years Telstra has tried to work within the framework set out by Part XIC of the Trade Practices Act,” Burgess said.

“The verdict is now in: it’s been impossible to achieve a fair result within the current framework. The framework allows arbitrary and capricious actions by the ACCC that are hostile to property rights that are key to jobs, growth and economic development in the digital age.”

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