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ACCC Expresses NBN-Telstra Competition Concerns

The Australian Competition and Consumer Commission (ACCC) has expressed concerns around the competition implications of Telstra’s involvement in the NBN rollout following Telstra and NBN today announcing a hybrid fibre-coaxial (HFC) delivery agreement.

Telstra has signed a new contract with NBN, which the telco has stated is worth approximately $1.6 billion, under which it will provide planning, design, construction and construction management services within its existing HFC footprint.

With the works expected to continue until the end of the NBN build, they cover geographic areas in Sydney, Melbourne, Brisbane, Gold Coast, Perth and Adelaide.

“All design, program management, construction management and scheduling activities will be undertaken by Telstra,” Telstra states.

Split into two areas, construction will comprise field construction activities to largely be performed by NBN’s multi-technology integrated master agreement partners, while Telstra will undertake in-exchange construction activities and limited upstream in-field activities.

A memorandum of understanding and letter of intent were signed late last year, with Telstra having undertaken some early works supporting build of the NBN in the existing HFC footprint, including preparing NBN exchange locations and HFC planning and design work.

The ACCC has stated that, “while recognising that using Telstra’s technical expertise will contribute to a quicker rollout of the NBN”, it “remains concerned that competition issues arise from agreements that involve Telstra in the construction and maintenance of the NBN”, including the HFC delivery agreement.

“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 commented.

The ACCC stated that it “has had extensive and productive discussions with NBN and Telstra”, seeking to address concerns related to Telstra’s role in providing design, engineering, procurement and construction management services to NBN under the HFC agreement, with NBN and Telstra recently providing a set of proposals aimed at addressing these concerns.

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

“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.”

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