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The Australian Competition and Consumer Commission (ACCC) has forced Telstra to rebate $6.5 million to wholesale ADSL customers affected by last year's move to slash retail pricing of its BigPond service. The retail pricing was only marginally above the wholesale price charged to other Internet service providers, thereby making it hard for them to compete on a profitable basis – a move which resulted in the ACCC issuing a "competition notice" on March 19 on the basis that it believed the carrier was engaging in anti-competitive conduct. In a negotiated settlement that sees the telco giant avoid court action that could have imposed fines of $10 million per contravention and $1 million for each day it continued, the ACCC also has put in place an arrangement that obliges Telstra to advise the Commission up to 15 working days in advance of future retail broadband prices and specials. In a statement, ACCC chairman Graeme Samuel says that while the Commission maintains Telstra's conduct was likely to have been in breach of the Trade Practices Act, the telco has since reduced its wholesale DSL pricing over a period of time with the latest reduction taking effect from January 1. In addition, he says Telstra has now agreed to rebate $6.5 million to its affected wholesale customers. The ACCC considers efficient wholesale customers are now no longer hindered from competing with Telstra BigPond's ADSL services on the basis of its reduced wholesale DSL pricing. Since the Commission commenced its investigation on February 16, 2004, Telstra has reduced its metropolitan list price for wholesale 256/64kbps access by approximately 30%, while 512/128kbps and 1500/256kbps charges have been reduced by over 30%. In addition, the carrier has collapsed its "regional 1" and "regional 2" wholesale DSL prices, thereby providing all DSL services at metropolitan rates. The ACCC believes this will increase competition between broadband providers in regional areas. Samuel says Telstra has acknowledged pricing changes made last February for its retail broadband services may have adversely affected the competitive position of its wholesale broadband customers. In light of the above, the ACCC does not propose to take any further action, he says.