The chairperson of the Australian Competition and Consumer Commission has hit back at claims from NBN Co that the time it took the watchdog to approve Telstra’s structural separation is to blame for a six-month delay to the National Broadband Network (NBN).
ACCC chairperson, Rod Sims, told a joint committee on the National Broadband Network in Canberra last night that NBN Co was responsible for the delay for handing the ACCC the agreement late.
While NBN Co had forecasted the ACCC approval of the structural separation by mid-2011, Sims said the ACCC didn’t receive the document until the end of July 2011.
“So to approve it in one month would have meant we just close our eyes and sign,” he told the inquiry.
“I think the key delay was the negotiations between NBN [Co] and Telstra,” Sims said.
“Our role necessarily was always going to take an amount of time, whether that was four or five or six or nine months. These things do take time, so I don’t think we contributed to the delay at all.”
NBN Co announced last week that a nine-month delay to the NBN had been a result of a delay in the approval process by the ACCC of the $11 billion definitive agreements between Telstra and NBN Co on Telstra’s structural separation.
While NBN Co stated it had been able to make up some of the time lost, the NBN is still running six months behind schedule.
Sims also fielded questions from the committee on the ACCC's approval of an $800 million deal between NBN Co and Optus, with Sims previously stating the agreement was anti-competitive.
The ACCC chairperson has come under fire for the approval, including from Malcolm Turnbull, the shadow minister for communications and broadband, and a member of the joint committee.
Turnbull has previously slammed the ACCC approval of the Optus and NBN Co agreement, stating that “nowhere else in the world has a government established a new fixed line monopoly and actually paid billions [of] dollars to the owners of the HFC networks not to provide broadband and voice. It is the very pinnacle of anti-competitive behaviour”.
“If cherry picking isn’t the issue, what detriment is there by leaving the competition in place?” a member of the committee asked Sims.
“At first glance it is a serious take-out of the main competitor and not something that sits comfortably with us,” Sims said.
Sims conceded that the cost of servicing the HFC network would be borne by Optus and not by the public, but reinforced earlier comments that the positives of the agreement for outweighed the negatives.
“Society is spending less resources if NBN does it than if Optus does it … The money paid is not relevant to the calculation. It’s all about where extra resources are going to service those customers,” Sims said.
“The HFC areas are quite wealthy areas, so we think the NBN would want to be there even to get the two-thirds of customers because they would be more likely to want high speeds than people in the rest of the country.
“We weren’t concerned about the risk of [Optus] going out of business. What we were saying is that over time as people wanted higher speeds, Optus would transfer its customers off the HFC onto the NBN, but we don’t know when that is. It may be 10 or 20 years out – we don’t know.”
Optus currently has 433,000 customers on its HFC network.
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