Australia - Telstra ready to fight deceptive conduct fine

[the australian] TELSTRA will today try to convince the Federal Court that it should not be fined up to $300 million despite admitting it engaged in misleading and deceptive conduct and breached the conditions of its carrier licence.

Nine days of hearings have been set for the Federal Court in Victoria.

The Australian Competition & Consumer Commission began the proceedings against Telstra in March 2009, alleging the telco denied wholesale customers such as Optus and iiNet space on equipment in seven lucrative metropolitan telephony exchanges.

Under standard obligations, Telstra is legally required to allow access to its telephone exchanges so that competitors can install equipment to provide new voice and broadband offerings for customers.

Telstra admitted the charges on July 31. In its filing, the telco admitted it had failed to comply with its access obligations under the Telecommunications Act 1997, contravening a condition of its carrier licence.

"At a time of rapid growth in broadband uptake, we made some mistakes evaluating requests from wholesale customers wanting access to our exchanges. We changed our processes two years ago to ensure it wouldn't happen again," Telstra spokesman Andrew Butcher said.

"I don't want to make excuses for what happened, but the mistakes we made involved less than 1 per cent of all requests. Still, 99 per cent or so isn't good enough."

The Telecommunications Act allows for fines of up to $10m per breach. Thirty breaches have been alleged, but it is unclear how many of these Telstra has admitted. The ACCC is seeking declarations, fines and injunctions.

Telstra has assembled an army of lawyers to help plead its case for a lesser fine, including the $10,000-a-day Melbourne silk Alan Archibald QC.

Industry commentators, referring to the lengthy nine-day hearing, believe Telstra is trying to put as much distance as possible between the impending judgment and the government's controversial telecoms reforms.

"This is another example of the so-called New Telstra using the same old tactics as the Old Telstra, using it financial muscle to string every dispute and debate out for as long as it possibly can, maximising the disruption and delaying justice, even when it admits it is in the wrong," Competitive Carriers' Coalition executive director David Forman said.

Telstra, however, maintains that it was the court that set the trial dates, not the telco. Both sides have submitted evidence from a number of witnesses for the case.

The impending telecoms legislation threatens to force Telstra to split its network.

Telstra ready to fight deceptive conduct fine