Premier Peter Beattie has slammed the price hikes describing them as an information tax that would hit homes and businesses throughout the state.
He said increases of up to 31 per cent in monthly home Internet fees for Telstra BigPond users could disadvantage users, especially west of the Great Divide.
Mr Beattie said the hikes 'went against the grain' in Queensland, where the government has promoted Internet use throughout the state and was currently processing expressions of interest from carriers wishing to provide Internet services to the northern third of the State, stretching from Bowen to the Northern Territory border and north to Torres Strait.
While the Premier denied his comments were a veiled threat to Telstra, the corporation now faces major opposition from government decision makers who urged Mr Beattie to voice his opposition to the price increases.
The Queensland Government has long been a vocal critic of Telstra and two years ago granted a major infrastructure contract to Optus and Reef Networks on the basis that it would provide competition for the corporation in areas where it previously had a monopoly.
The contract was to provide and manage a broadband pipeline stretching from Brisbane to Cairns and was completed last year.
"We want more people to share in the benefits of new technologies, and a key to that is affordability. But this Telstra move is a tax on information, and I only hope their customers send the message that they would rather have a cheaper service," Mr Beattie said.
He said the corporation had the most extensive network in Queensland and was using its market power to disadvantage users.
"West of the Great Divide, Internet users have little or no choice but Telstra and higher charges threaten to widen the digital divide between coastal Queensland and people living in rural and remote areas."
But he said the increases would affect households and businesses throughout the state.
"In Queensland, 44 per cent of households have Internet access, compared to 37% nationally.
"We also have a burgeoning computer games industry, the largest cluster of e-security firms outside North America, and a fast-growing multimedia industry.
"But business also could suffer under Telstra's new package. "The cost of video conferencing may become prohibitive, and the film and multimedia (games) industry would be hit by high costs when emailing large files to production houses," he said.
It's about time someone from the government has the gut to stand up to this Hitler-dictatorship that is Telstra and stop them from abusing their monopolistic power by milking every last cents from the public while their infrastructure is pathetic to say the least.