Telstra not guilty for lag in telco industry

While the ACCC is investigating complaints that Telstra has been providing "inadequate" interconnection services since November 1999, an ACCC spokesman said it is the industry itself, not Telstra, that is to blame.

According to Chris Pattas, an ACCC telecommunications spokesman, the issue is that other carriers and ISPs are putting in smaller PSTN (telephone) networks to offer their own services of lower rates and free internet access. "This has led to significant increases in interconnect capacity."

Telstra supplies switchport infrastructure enabling interconnection between networks.

Pattas said that "at one stage" since November 1999, wholesale customers wanted 1000 switchports from Telstra, "a very small proportion" of which Telstra could supply.

Telstra attributed the fulfilment lag to ISPs and wholesale customers providing "seriously underestimated" forecasts for switchports. "This issue is based on the failures of other ISPs, not Telstra," said Liz Jurman of Telstra corporate affairs.

"We've worked closely with our customers, but the demand does not meet projections." She declined to name any ISPs who had failed to provide accurate projections.

Telstra had been inundated with "unexpected" interconnection service demand due to a surge in ISPs "popping up as customers of customers", Jurman said.

While the ACCC said the lag in delivering switchport services was unacceptable, it decided this was insufficient reason to claim that Telstra had contravened the competition rule in The Trade Practices Act 1974.

"We think it's hard to say where the fault lies," Pattas said. "It's an industry-wide issue."

The ACCC said that bilateral contractual agreements between Telstra and individual ISPs and carriers were "inadequate". "We aren't telling Telstra or all the industries what to do," Pattas asserted.

However, the ACCC recommended Telstra "assess" their ordering and provisioning process by adopting a "multilateral" approach with individual ISPs and carriers to establish "broad, forward planning" for efficient interconnection service, Pattas said.

Yet Telstra remains confused as to what the ACCC was recommending. "We're not clear why they've suggested a change if the ACCC did completely clear us last week," Jurman maintained.

She also questioned the need for a more transparent forecasting and provisioning process, given that ISPs were cagey about releasing customer and earnings figures that could inadvertently be released to competitors.

Meanwhile, Telstra "did not believe" it had lost any wholesale business as a result of the ACCC warning.

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