ACCC approves revised NBN deal with Optus

28 August 2015

The Australian Competition and Consumer Commission has issued a final decision granting authorisation to specific provisions within revised agreements between NBN Co and Optus.

Authorisation is granted for 35 years and follows the ACCC’s draft decision released in July.

The ACCC has also decided not to oppose NBN Co’s proposed acquisition of Optus’ HFC network.

“The ACCC’s assessment turns on the extent to which Optus and NBN Co are likely to compete absent the proposed acquisition,” ACCC Chairman Rod Sims said.

The ACCC accepted that in the absence of the revised arrangements, the parties would have relied upon their original arrangement which would ultimately result in Optus decommissioning its HFC network.

The original arrangement was authorised by the ACCC in 2012 and in assessing the revised arrangements, the ACCC concluded that it would not have exercised its discretion to initiate a revocation of the existing authorisation.

“The ACCC had regard to the need for regulatory certainty and its view that the balance of benefits and detriments identified by the ACCC in 2012 was not likely to have changed, despite policy and technological changes since then,” Mr Sims said.

“This was partly because Optus would still be unlikely to invest in significant upgrades of its HFC network in order to provide infrastructure based competition beyond the short to medium term.”

“Regardless of whether the proposed acquisition occurs or not, we judged that Optus and NBN Co would not compete with each other,” Mr Sims said.

“As a result, the ACCC concluded that the proposed acquisition is unlikely to substantially lessen competition in any relevant market.”

The revised arrangements involve the progressive migration of Optus’ HFC subscribers to the new multi-technology NBN, while parts of Optus’ HFC network are integrated into the NBN.  They also involve an obligation on Optus to use the NBN for 15 years and Optus sharing spectrum on its coaxial network with NBN Co, prior to NBN Co taking ownership of that network.

These arrangements form part of a broader transaction between the parties which involves the acquisition of Optus’ HFC assets. This meant the ACCC had to assess the proposed arrangements under two separate processes – the authorisation provisions of the Competition and Consumer Act 2010 (the Act) and its informal merger review process.

Under the authorisation process, the ACCC assesses the likely public benefits and detriments generated by proposed ant-competitive conduct.  In contrast, assessing a proposed acquisition of assets requires the ACCC to consider the impact on competition, but not public benefits.

“The ACCC acknowledges the broader proposal for NBN Co to acquire Optus’ HFC network assets will allow it to utilise existing HFC infrastructure in rolling out the NBN, which is likely to generate cost savings,” Mr Sims said.

Further information, including the ACCC’s final decision on the authorisation application, is available at http://registers.accc.gov.au/content/index.phtml/itemId/1184734/fromItemId/278039

Further information about the informal merger review is available at http://registers.accc.gov.au/content/index.phtml/itemId/1188836/fromItemId/751046

Background

23 July 2015: ACCC proposes to approve revised NBN arrangements with Optus http://www.accc.gov.au/media-release/accc-proposes-to-approve-revised-nbn-arrangements-with-optus

Release number: 
MR 158/15
ACCC Infocentre: 

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