Telstra's chief executive, Ziggy Switkowski launched the attack after Professor Fels told the Australian Telecommunication Users Group (ATUG) 2003 Conference that competition was failing, with Telstra's dominance of the market being a clear indication of this.
"Telstra has overwhelming dominance across the telecommunications market, and in almost every segment of that market," Fels said.
Fels claimed that Telstra's ownership of the "last mile" copper network, which is the physical connection between customers and exchanges, is having a negative impact on competition.
"...in order to reach potential customers all other providers must at some point interconnect with Telstra," he said.
"Its control of the Customer Access Network allows it to have significant influence over the retail prices of its competitors in all markets where access to the network is necessary," he added.
He says that often other providers have no option but to use Telstra's network.
"Despite the emergence of some facilities based competition, few of Telstra's competitors have any real alternative to the extensive use of its network service," he said.
He was also heavily critical of what he called "delaying tactics" used by the carrier over a breach of competition rules over the resale of ADSL services.
"Telstra's market power derives, therefore, not merely from market share but from its control of inputs essential to the provision of downstream services and it will retain control over critical inputs for the foreseeable future."
However, Switkowski asserted that competition was healthy and that Telstra was on top not because they are an incumbent, but because customers prefer the carrier.
"Australian consumers now have a choice of provider, and those who have chosen to stay with Telstra have done so because of our competitive prices, world leading technology and improved service levels," Switkowski said.
Switkowski went on to claim that Fels was "missing the point" because regulatory controls have been set in place to allow competitors to access Telstra's Customer Access Network.
"The ACCC chairman's key argument - that Telstra retains 94 per cent of the wholesale local call market - misses the point as the regulatory access regime is designed to specifically give competitors wholesale access to Telstra's network rather than requiring them to build new infrastructure," he said.
"Australian consumers now have a choice of provider, and those who have chosen to stay with Telstra have done so because of our competitive prices, world leading technology and improved service levels," Switkowski said.
Pig's Arse Ziggy!
For many of us, Telstra are still the only game in town because they are the only telco that provide a basic phone service. None of the fancy bells and whistles, or internet connections, or stuff like that. Just a good old plain basic phone service.
Or, we're still with telstra because when we tried to change away, for some reason we did not get put across.