ACCC reports on NBN Co-Telstra agreements on rollout

2 September 2016

The Australian Competition and Consumer Commission has today issued its report on potential competition issues raised by commercial agreements between Telstra and NBN Co relating to Telstra’s role in building parts of the National Broadband Network (NBN). 

“NBN Co and Telstra have said that one of the benefits of these commercial agreements is that it will facilitate a faster rollout of the NBN, which the ACCC acknowledges, but we also recognise that there are potential competition implications and the effect of these on end users is just as important,” ACCC Chairman Rod Sims said.

The report outlines the ACCC’s concerns the agreements may give Telstra a “head start” in connecting customers to NBN HFC broadband services, preferential service activation and/or repair of NBN broadband services for its own customers, and greater insight than its competitors into the NBN rollout.

The ACCC says NBN Co and Telstra have agreed a number of measures that the ACCC considers will mitigate the potential risks to competition, which the ACCC will continue to monitor.

The measures include:

  • Making NBN HFC connections available to all service providers simultaneously, to avoid Telstra getting a “head start” following its installation of them
  • NBN Co setting priorities on activation and repair work that it allocates to Telstra, requiring Telstra to follow those priorities and de-identifying work orders from other RSPs
  • Telstra providing “white label” activation and repair services to NBN Co and requiring its field workforce follow non-discrimination rules when attending end-user premises.

“The ACCC is pleased at the progress made to date in terms of these agreements, but there’s still work to do to address our remaining concerns. We will continue to monitor the relationship between NBN Co and Telstra, and ensure that Telstra’s contracts with NBN Co do not give it an advantage over its competitors in providing superfast broadband services over the NBN,” Mr Sims said.

The ACCC says it is now working to ensure all access seekers have more rollout information, and receive reports on whether or not they are receiving equivalent treatment.

The ACCC’s assessment and the measures NBN Co and Telstra have implemented are set out in the ACCC’s report available at: http://www.accc.gov.au/publications/accc-assessment-of-nbn-telstra-service-delivery-agreements

Background

The NBN Co-Telstra service delivery agreements were announced on 21 December 2015 and 11 April 2016 and are for the supply, amongst other things, of network activation and assurance services and network planning, design, construction, and construction management services.

In preparing this report, the ACCC consulted with a number of broadband retail service providers and raised a number of potential concerns with NBN Co and Telstra to ensure that they were known to the parties as the details of the agreements were developed.

NBN Co and Telstra did not make their binding agreements subject to ACCC approval. Nor did the parties defer implementing them during the ACCC’s review.

The next step in this matter will be to establish suitable arrangements for monitoring of the implementation of the agreements, including NBN Co’s reporting of rollout information to its access seekers, ahead of the HFC construction program reaching scale later this year.

Release number: 
MR 159/16
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