ACCC 'concerned' about Telstra's NBN contracts

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ACCC 'concerned' about Telstra's NBN contracts

Could pose competition issues.

Australia's competition watchdog is "concerned" about the level of Telstra's involvement in the national broadband network rollout and its effect on competition in the telco sector.

Just hours after the telco and NBN announced a $1.6 billion deal for the rollout of Telstra's hybrid-fibre coaxial (HFC) network, the ACCC said it was worried the telco could potentially receive a competitive advantage from its various NBN contracts.

Among others, Telstra holds two contracts to fix faults on its copper network, and a four-year, $390 million contract to provide wider planning and design services for the NBN.

The new deal - which is in addition to the renegotiated $11 billion definitive agreements signed between Telstra and NBN in late 2014 to include the HFC network - will see Telstra help build and upgrade its HFC cable for the NBN.

It has been tasked with delivering all design, program management, construction management and scheduling activities within its HFC footprint across Sydney, Melbourne, Brisbane, the Gold Coast, Perth and Adelaide. 

Under the deal, Telstra will deliver in-exchange construction activities and limited upstream in-field construction. Most field construction work will be undertaken by NBN build partners, the telco said.

While it recognised that Telstra's expertise would help roll out the NBN faster, the ACCC said the deal - and more broadly Telstra's involvement in the maintenance and construction of the NBN - posed competition problems.

“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 chairman Rod Sims said in a statement.

The watchdog said it had undertaken "extensive and productive" discussions with both parties to address its concerns, and revealed NBN and Telstra had recently offered up several proposals to address the issue.

“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."

The Competitive Carriers Coalition, the representative group for smaller telcos, echoed the ACCC's concerns about Telstra's potential competitive advantage.

"... it will have more information than any other retailer about when, where and how NBN will be turned on," the CCC 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."

An NBN spokesperson said the parties were mindful of the ACCC's concerns when structuring the deal, and had offered undisclosed monitoring and reporting measures to the watchdog.

"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 said.

NBN is expected to release a limited wholesale HFC product to retail service providers in the Redcliffe region of Queensland in June, ahead of a wider offering over the next 12 months.

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