A Melbourne man has taken legal action against Telstra over its BigPond broadband cable service contracts.

Robert MacMillan of Elwood Victoria has lodged a statement of claim against Australia's telecommunications titan in a Victoria Magistrates court for breach of contract and misleading and deceptive conduct.

MacMillian claims Telstra breached a contract with him when it altered the pricing for its cable broadband service in late January, approximately 20 days after it was installed at his property.

In his complaint, MacMillan also accuses of Telstra breaching the Fair Trading Act. He claims the carrier was "clearly intending to increase prices" when it advertised the service and was therefore unlikely to honor the offer.

If MacMillan succeeds against the telco giant in court it won't have been a minor feat. He is pursuing a course of action that the regulatory bodies have already deemed unlikely to succeed.

Telecommunications Industry Ombudsman (TIO), John Pinnock said he ceased pursuing MacMillan's complaint after preliminary investigations found fundamental flaws with his case.

In making his case, MacMillan is relying on a copy of the BigPond Web page posted January 5th containing pricing details he believed he agreed to for the service.

Pinnock said MacMillan's legal positioned is severely weakened by a provision of the Telecommunications Act that applies in the absence of a specific contract for telecommunications services.

Under part 23 of the Telecommunications Act, in the absence of a specific contract for telecommunications services, terms contained in a carrier's Standard Form of Agreement (SFOA) apply by default, according to Pinnock.

"[Macmillan] described to us that he'd agreed that he hadn't read the terms and conditions; he'd relied entirely on the advertising," said Pinnock.

"It's no argument to say 'I didn't read any terms and conditions', you only have to think about it for a moment to realise that the advertising could not possibly constitute the whole of the contract".

MacMillan contests that applying for the service by phone, having it installed and having his payment for the first month of its use accepted by Telstra, constituted a contract binding the carrier to abide by the pricing it orignally published on its Web site prior to January 29.

"[Telstra] made the offer of service for a period at a cost and all I wanted was the service for the period at the cost -- they're really struggling to get their heads round that," said MacMillan.

While the TIO has chosen not to support MacMillan's action, Pinnock clearly has misgivings about the fairness of what he refers to as "part 23".

He pointed out that there are arguments that part 23 could be challenged by provisions in the Trade Practices Act relating to conscionable behavior.

"That's the really interesting argument," said Pinnock. "Could you mount a case that part 23 itself, in some circumstances, could be unconscionable?"

Pinnock also concedes that consumers may sometimes not be able to distinguish between advertising and contract terms.

"One of the thing's that [the TIO] is upset about is that people are often given advertising and then they're given a summary document, but they're still not given the terms and conditions," he said.

That might mean that in many instances consumers agree to SFOA terms unknowingly when applying for telecommunications services verbally through call centers.

For now, the TIO said it would apply new guidelines currently being drafted by Australian Communications Industry Forum that test the fairness of legally-binding telecommunications contracts when investigating complaints against carriers.

Australian Telecommunications Users Group managing director, John Pack, said that there is a lot of confusion in the market place over the role of SFOAs. Pack said that many of its members often find that Telstra's SFOA has over-ridden their contracts, leaving them unsure where they stand.

"People have expressed concern that Telstra are able to change that at will and that actually becomes the standard for the agreement," said Pack.

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