Telstra fined $18m for exchange capping

Telstra has been fined $18.55 million for "exchange capping", restricting exchange access to other internet service providers, after a verdict was handed down in the Federal Court this morning.

Telstra has copped an $18.55 million fine after it was found by the Federal Court to have blocked competitors out of exchange facilities.(My Trusty Gavel image by Brian Turner, CC2.0)

Telstra told ZDNet Australia in a statement that the telco would not be appealing the penalty.

"Since the start of the case, we have acknowledged that mistakes were made. We accept the judgement which has been handed down. We will not be appealing," Telstra said.

The fine is the result of an ongoing legal stoush between Telstra and the Australian Competition and Consumer Commission (ACCC) after the telco was accused of restricting competitor access to its telephone exchanges last March.

Telstra claimed that several of its telephone exchanges were full or "capped", leaving competitors looking to connect new customers and install Digital Subscriber Line Access Multiplexer (DSLAM) infrastructure out in the cold.

The ACCC argued that Telstra was purposely shutting competitors out and pursued legal action, claiming a contravention of the Trade Practices Act.

Speaking at last year's Australian Telecommunications User Group Conference, ACCC chairman Graeme Samuel issued a stern warning to the telco that the regulator was not afraid to pursue legal action if it believed Telstra was slowing down new technology roll-outs.

Telstra has also drawn the ire of its competitors after slashing the cost of its BigPond broadband offerings without adjusting wholesale pricing. The question of whether or not Telstra will pass on the price cuts to its wholesale customers hangs in the air.

Internode and iiNet lodged complaints with the ACCC regarding the growing gap between Telstra's consumer and wholesale pricing.