CNET

Telstra, the nation's largest telecommunications provider, has admitted that its testing procedures led to some broadband customers being told they could only be served by Telstra BigPond. The admission comes following the Australian Competition and Consumer Commission's annual review of Telstra's Structural Separation Undertaking -- a series of commitments made by the telco to safeguard competition and maintain transparency during the nationwide switchover to the National Broadband Network (NBN).

In its review, the ACCC found Telstra "did not meet" a number of commitments that it gave in its SSU, including "failing...[to] introduce ADSL broadband service enhancements to retail and wholesale customers at the same time".

The ACCC also found that Telstra failed to properly secure "confidential or commercially sensitive wholesale customer information provided to Telstra in its capacity as access provider of regulated services" from employees in Telstra's retail business.

Speaking about the breaches, ACCC Commissioner Cristina Cifuentes said Telstra's 'failings' were examples of the "perennial competition issues arising from Telstra's vertical integration".

In response to the ACCC's findings, a Telstra spokesperson said the company "proactively identified" gaps in security systems protecting customer information and it was "investing significantly" in systems to fix them.

"The report includes no evidence to suggest our retail staff have used wholesale customer information to gain an unfair commercial advantage," the spokesperson added.

Furthermore, Telstra said that the ACCC's report "outlines some gaps that create the potential for non-equivalent treatment as well as actual actions by Telstra that have impacted our wholesale customers," but that there were a "small number" of these issues.

However, the telco has been slammed by the Competitive Carriers' Coalition for continuing to "systematically discriminate against consumers trying to buy broadband from competitors by incorrectly claiming their telephone lines were unable to provide a service".

The CCC said it has had "years of complaints" on the issue from its members, which relate to Telstra using a different standard to test lines for broadband ordered through competitors compared to the test used for Telstra customers.

"Telstra has finally admitted that it has been rejecting applications for broadband from customers who wanted to use anyone but Telstra, simply because it was not testing their lines properly," said a CCC spokesman.

"By contrast, if the order came from Telstra Retail, surprise, surprise, a more thorough test was applied. As a result, consumers were told they could not get broadband from a competitor, but told they could get it from Telstra."

In a letter to customers Telstra admitted the fault, saying it was "committed to fixing this issue" and was implementing a Rectification Scheme for affected customers. It also confirmed it was working to change its IT systems to ensure testing was equivalent for Telstra wholesale and retail customers, and that this would take six months to implement.

However, the CCC said Telstra was dragging its feet on the issue.

"Even now, this admission has only come after a competitor complained," the CCC said about Telstra's communication with customers.

"This is further evidence of the importance to deliver genuine structural separation of the access network by ensuring that the NBN is owned and operated completely independently of any retailer. It is also crucial that the ACCC demands Telstra remedies this unfair treatment quickly, and not in six months as Telstra proposes."