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Legal Action In Air As Telstra Inks $1.6bn NBN Deal

Telstra yesterday announced it had signed a $1.6 billion contract with NBN Co to provide services for its hybrid fibre coax (HFC) rollout – and has found itself the subject of serious concerns by the Australian Competition and Consumer Commission.

The contract comes on top of the $11 billion deal Telstra struck earlier with NBN Co, allowing NBN to take control of Telstra’s cable network, followed by two contracts to fix any faults on its copper network, and a four-year, $390 million contract to provide NBN Co with planning and design services.

To no-one’s great surprise, the ACCC said it now has “major concerns” about the “competition implications of Telstra’s involvement in the rollout of the NBN network”.

Legal action has so far not been mentioned. But observers say that option could well emerge if talks between Telstra and the ACCC are unproductive, at least from the ACCC’s point of view.

In its announcement, Telstra said the latest deal is planned to run until the end of the NBN build, currently expected by the end of 2020. NBN Co plans to use HFC cabling to connect four million premises, with 3.6 of these coming from the old Telstra HFC cable-TV network, the others with Optus.

The ACCC said its major concern is that Telstra could receive a competitive advantage from its NBN contracts. As well as the deal announced yesterday, these include two contracts to fix faults on its copper network, and a four-year, $390 million deal to provide planning and design services for the NBN.

Sims revealed that Telstra and NBN Co had offered several proposals to address these and other issues – but said only that ACCC is looking at these “carefully” to see if they address its concerns. Stay tuned …

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