Competition concerns over Telstra role in NBN HFC rollout

ACCC worried that Telstra may receive an unfair advantage when it comes to selling services on the HFC network that the telco is transferring to NBN

ACCC chairperson Rod Sims

ACCC chairperson Rod Sims

The Australian Competition and Consumer Commission is concerned that Telstra may potentially have unfair advantages when it comes to selling services on the hybrid fibre-coaxial (HFC) portion of the National Broadband Network.

NBN and Telstra announced today that they had signed a previously mooted contract for planning, design, construction and construction management work relating to HFC infrastructure.

Under the $1.6 billion contract, Telstra will carry out work within the footprint of the telco’s HFC network, ownership of which is being transferred to NBN.

“We have raised several concerns with Telstra and NBN Co, including that Telstra may receive a competitive advantage if it has access to better information than other service providers or if it is able to use infrastructure built for the NBN network before that infrastructure becomes available to other retail service providers,” ACCC chairperson Rod Sims said.

The ACCC said it had been in discussions with NBN and the telco over the implications of the HFC arrangements and the two parties had provided the competition watchdog with proposals aimed at addressing its concerns.

“We are looking at the parties’ proposals carefully to consider to what extent these proposals address our concerns,” Sims said.

“It is important that Telstra doesn’t get a head-start selling retail services over the NBN just because its technical expertise is being used in the construction and maintenance of the NBN.”

A statement from the Competitive Carriers' Coalition said the agreement “raises serious questions about how much consumers and competitors are being compromised in order to speed up the delivery of the NBN in areas where it is dependent on Telstra’s technology”.

“This is a very serious threat to consumers and competition,” CCC chairperson Matt Healy said.

“It is imperative that the proposals to protect competition that the NBN and Telstra have presented to the ACCC are made public, not negotiated in secret and foisted on the market.

“The move to a multi technology mix was supposed to make the NBN rollout faster, not make it more secretive and less competitive, and consumers and competitors need to be able to comment on whether the private contract between NBN and Telstra protects their interests.”

The NBN-Telstra HFC agreement is not subject to ACCC approval, an NBN spokesperson said.

“As the ACCC has acknowledged, the parties have had extensive and productive discussions with the ACCC. We have already provided a significant amount of information to the ACCC,” the spokesperson said.

We continue to work closely with the commission and we are pleased that the ACCC recognises that the transaction will contribute to a quicker rollout of the NBN

“We were very mindful of these perceived issues when we structured the deal and have also offered the ACCC additional measures around monitoring and reporting back to the ACCC.”

“As we are an open access wholesale only, non-discriminatory operator, we have every incentive to make sure all internet providers have the same opportunities to access our network as quickly as possible,” the spokesperson added.

It is not the first time that concerns have been raised that Telstra could receive an unfair advantage due to the information asymmetry between the telco and other RSPs.

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Tags Australian Competition and Consumer Commission (ACCC)NetworkingHybrid Fibre Coaxial (HFC)nbn coNational Broadband Network (NBN)national broadband networkTelstra

More about Australian Competition and Consumer CommissionCompetitive Carriers' CoalitionNBN Co

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