Optus negotiations around a Telstra-style agreement with NBN Co and the government to migrate its Hybrid Fibre Coaxial (HFC) customers are expected to progress shortly, now that key legislation has passed the Senate.
The talks, which have reportedly been ongoing since at least October, are concerned with a potential migration of customers on Optus’ HFC cable network onto the National Broadband Network (NBN). The agreement would hold similarities to an $11 billion financial heads of agreement between Telstra, NBN Co and government to migrate both copper and HFC customers onto the network.
However, the talks were effectively placed on hold by the no. 2 telco until legislation concerning access arrangements under the NBN and the operational governance of its wholesaler were concreted.
The future of the discussions were placed in limbo last Thursday, with Optus chief executive, Paul O’Sullivan, threatening action should the Federal Government pass legislation including some amendments the company was unhappy with.
The telco held emergency meetings with government as a result of the amendments in hopes of gaining reassurances around equal access to the NBN by telcos and service providers.
It ultimately won concessions on some of the amendments, including dumping one in which NBN Co would have veto powers over the Australian Competition and Consumer Commission (ACCC) for key decisions on the network, including the number and locations of points of interconnect.
Another amendment, which would have provided volume discounts to telcos, also failed to be passed by the Senate last week.
“The first cab off the rank was to get the legislation in place so we had a bit of certainty around what rules we were playing with,” Optus director of government and corporate affairs, Maha Krishnapillai, told Computerworld Australia
“The second will be, if we are to migrate our HFC customers onto an NBN-style network, how that would work. We’re still working through the technical and other implications around that.”
Now legislation has been passed, the telco is expected to decide whether to go ahead with the deal, though an exact date is as yet unknown.
Though the telco remained unhappy with minor amendments pushed through with the legislation, Krishnapillai said the company was happy with the overall results.
“We are very concerned around NBN Co’s overreach, and we want to make sure there are as many checks and balances around NBN powers as we can,” he said.
“NBN Co can’t be put in a position where it has an incentive, in other words it would be just as bad as Telstra in the olden days. We want to have the ability of an umpire over the top.”
Internode managing director, Simon Hackett, echoed similar concerns around the passing of legislation late last week.
“The timing of this remarkable (and unexpected) late change in key NBN legislation is curiously coincidental, with Telstra announcing delays to 'the deal' between it and NBN Co,” he said by email.
“We all need the shiny new NBN to be a 'good' wholesale-only, level playing field, monopoly that replaces the current 'bad' vertically integrated Telstra monopoly.
"The sheer complexity of this legislation and the timing and volume of these late changes would seem to present significant risks to that utopian future.”
Though Telstra’s financial heads of agreement is all-but-sealed, a mandatory vote by company shareholders and the ACCC have been repeatedly delayed, with an extroardinary general meeting scheduled in July recently pushed back.
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