Telstra to Challenge Australian Regulator in Court

Telstra, Australia's largest phone company is planning a legal challenge to the powers of the country's competition regulator.

The challenge follows a dispute between Telstra and the Australian Competition and Consumer Commission (ACCC) over wholesale broadband prices -- the amount Telstra can charge its rivals for using its broadband network.

"The ACCC has set wholesale broadband prices at record new lows that are far beneath the company's actual costs, meaning the subsidies funded by Telstra's shareholders will have to rise yet again," Telstra's group managing director, public policy and communications, Phil Burgess, said in a statement.

Telstra argued that the regulator's price decisions did not comply with a clause in the Australian Constitution that guaranteed "just compensation when property is compulsorily acquired".

"The most recent decision of the ACCC, announced in the days before Christmas, allows Telstra's competitors to buy broadband infrastructure for just A$3.20 per month, and then re-sell it for around 10 times that amount," Burgess said. Telstra was previously charging its competitors A$9 a month.

Telstra has taken an aggressive approach to fighting regulation, but lessened its attacks in the lead-up to a sale of part of the government's stake in the company last November that raised A$15.5 billion (US$12.1 billion).