Telstra, NBN Co extend deal deadline

ACCC decision in February.

The $9 billion deal between Telstra and NBN Co faces delays of up to two months as the competition watchdog considers revised undertakings from the telco.

Telstra this morning submitted a revised structural separation undertaking to the Australia Competition and Consumer Commission, 11 days out from when the definitive agreements between the parties are set to become null on December 20.

The ACCC confirmed it would look to begin public consultation this month on the revised undertaking, which clarifies the roles both Telstra and the watchdog will play over the next decade.

Watchdog chairman Rod Sims said theregulator would make a final decision on the undertaking in February.

Neither Telstra or NBN Co could clarify a new deadline for the agreements at time of writing.

But Telstra told investors this morning that changes in the revised undertaking were not considered "material" and the undertaking would not require a second shareholder vote.

The undertaking and accompanying migration plan set out the steps Telstra will take to decommission its copper access network and broadband services on its hybrid-fibre coaxial network as the National Broadband Network is rolled out.

Telstra will progressively migrate its fixed line broadband customers over to the new network under the deal.

Taking on concerns from industry and the ACCC, Telstra revised its undertaking to clarify commitments around supply of regulated services as well as its staff structure and security under interim separation requirements.

"We believe the revised SSU provides the interim arrangements the industry requires as it transitions to the structurally separated model provided by the National Broadband Network," said Telstra chief executive David Thodey.

However, Sims indicated a final decision on the undertaking would also be predicated by current inquiries around wholesale line rental, local call services and public switched telephone commitments.

The ACCC will also kickstart a new public inquiry into declaration of wholesale ADSL services, one of the key sticking points of the undertaking's provisions.

Though the service would form part of a rate card Telstra pledged to the public in providing price equivalence to its retail arm and competitors, an initial indication of those prices were deemed by the industry to "cement" the incumbent's retail squeeze on the market.

"It has become apparent through this and other processes that there are outstanding regulatory concerns in relation to wholesale ADSL services," Sims said.

He said the watchdog was giving "urgent consideration" to the inquiry but did not clarify when it would begin, or whether it would further push back a final decision on Telstra's undertaking.