Australia biggest ISP admits to lying

By Peter Nowak, CBCNews.ca. Last week saw an interesting revelation from Telstra, Australia's biggest phone and internet provider. New CEO David Thodey admitted to a court that Telstra had lied to block rival internet service providers from accessing its network. Under previous CEO Sol Trujillo, an American, Telstra had told other ISPs that several of its downtown telephone exchanges were full so they couldn't install their own equipment and thereby provide customers with their own services. There was, in fact, plenty of space but Telstra was playing dirty tricks to cut its competitors off at the knees.

Yikes. That's quite the admission. Telstra is facing a fine of up to $300 million Australian for its misleading and deceptive conduct. Thodey, however, seems intent on changing his company's image and repairing relations with the government, both of which were sorely strained under Trujillo. I actually covered telecommunications in New Zealand during part of Trujillo's reign and was thus exposed to it.

Telstra, like big phone companies in just about every developed country including Canada, is required by law to open its network for other ISPs to rent. The idea is that the phone networks were built decades ago when the companies were government-owned, taxpayer-funded monopolies. Opening them up for all to use is one way of ensuring that no one company benefits from that taxpayer investment, and it also encourages more competition among a number of players. The owners of those networks, however - with this Telstra case being a shining example - have often gone to incredible lengths to stymie their competitors' access.

When I was Down Under, I heard some amazing stories from smaller ISPs in Australia and New Zealand about the depths their phone incumbents plumbed in order to block competition. In one case, the phone company told the smaller ISP it had "lost the keys" to the building. In perhaps the most devious instance, the phone company demolished a bathroom in one of the buildings, thereby preventing the smaller ISP's contracted workers from entering. Government bylaws, you see, required that contractors be provided with somewhere to pee in their workplace.

What's interesting about the Telstra example is that the company's abuses were only brought to light through complaints lodged by the Australian Competition and Consumer Commission, a watchdog agency formed back in the nineties to administer the country's Trade Practices Act.

Here in Canada, the Canadian Radio-television and Telecommunications Commission referees fights between big phone companies and small ISPs all the time, with the most recent high-profile skirmish being over the issue of Bell Canada's internet throttling. But our equivalent of Australia's ACCC, the Competition Bureau, has to my knowledge never investigated any such blatantly anti-competitive charges. That either means the Bureau is turning a blind eye or these sorts of things simply aren't happening.