Telstra has cracked under pressure from the competition watchdog and the possibility of AU$10 million penalties and will reduce ADSL pricing in the wholesale arena, making it more viable for competitors to resell ADSL services.

The Australian Competition and Consumer Commission (ACCC) served the telco behemoth with a competition notice in September this year, giving it a 12-week deadline to change its anti-competitive conduct or risk being stung with penalties exceeding AU$10 million.

Today, the telco giant said that in response to -customer concerns" it is taking a -whole new approach" to its provision of ADSL. -Rather than just taking a slice off the price, we've gone into the engine of DSL and looked at the whole functionality," Graeme Salt, public affairs manager, Telstra Wholesale, told ZDNet Australia.

Whilst Salt claims that feedback from customers has been positive, he declined to disclose details of Telstra's new high-speed Internet pricing.

-We won't be making an announcement until we get a few deals signed," he said, adding that there are probably four deals just days away from completion.

At the time it when the ACCC doled out its competition notice and twelve-week deadline to the telco heavyweight, the competition regulator claimed Telstra supplied its wholesale high-speed Internet services at prices -whereby competitors buying the wholesale service are unable to compete with Telstra's own BigPond retail prices".

In retaliation, Telstra said its wholesale ADSL pricing was -around cost", with its wholesale division very vocal on the likelihood of retail prices rising if it were forced to slash wholesale pricing. -If the ACCC wants us to increase the wholesale gap do they really want us to increase ADSL retail pricing?" Salt said in an interview with ZDNet Australia at the time. However, this time around, the wholesale group refused to be drawn into discussion about the likelihood of retail prices rising, saying it was a -completely separate side of the business".

ZDNet readers have expressed their anger at what they consider to be Telstra's anti-competitive behaviour in the broadband arena.

-Broadband and ADSL deployment has suffered immeasurable damage which will take years before it recovers fully," one ZDNet reader said. -Without competition, Telstra's pricing policies combined with its incompetent technical implementation and poor level of service effectively suppress our ability to be leaders in the communications and business arena. By maintaining an inflated wholesale price for the broadband services, as usual, Telstra fails to see that 100 percent of nothing is nothing and in the process, locks out all competition, which is of course what it's very good at. It's a joke the ACCC has allowed it to continue without taking the strongest action allowed under the legislation. Monopolies do not work in our best interests. They are self serving. We never learn."

Copyright © 2009 CBS Interactive, a CBS Company. All Rights Reserved.
ZDNET is a registered service mark of CBS Interactive. ZDNET Logo is a service mark of CBS Interactive.