Telstra drops NextG court case

Independent telecommunications analyst Paul Budde told CRN that Telstra had a very difficult job in proving the Australian Competition and Consumer Commission’s (ACCC) interpretation of the telco’s Next G advertisements misleading was incorrect.

“I think it had a very difficult case in hand because it was pretty obvious the advertisements could have been misinterpreted by consumers. The implications of the Next G advertisements were seen to be misleading by the ACCC and could have been easily misread by customers and Telstra knew the ACCC had a technical case that it could prove the telco wrong,” he said.

The ACCC brought proceedings against Telstra in September 2007, alleging that Telstra had engaged in misleading or deceptive conduct to the detriment of consumers. The illegal conduct included representations that the Next G mobile network had "coverage everywhere you need it" and that Next G customers would get the same or better coverage as they did on the CDMA network.

On 19 December 2007, the Federal Court granted the Australian Competition and Consumer Commission declaratory relief and made injunctions permanently restraining Telstra from making several representations.

These include mobile coverage on the Next G mobile telephone network being always available to Next G customers everywhere the customer needs to use their mobile telephone. A further claim stated that a customer subscribing to the Next G mobile telephone network would receive the same or better coverage than is available currently on the CDMA network. The telco did not disclose that coverage on the Next G network depends in part on where the person is, what particular handset the person is using and whether that handset has an external antenna attached.

ACCC chairman, Graeme Samuel said Telstra must now pay the costs of the ACCC occasioned by the appeal together with the costs of the ACCC's proceedings.

"Telstra's decision to discontinue its appeal proceedings brings a welcome end to this matter, and vindicates the ACCC's strong intervention to protect consumers from misleading marketing in the telecommunications industry," he said.