Australian regulator ‘concerned’ about Telstra broadband deal

12 April 2016 | Alan Burkitt-Gray


Australia’s competition commission has expressed its concern about a new contract under which Telstra will help upgrade the country’s new broadband network to 2.8 million homes.

The National Broadband Network Company – a government-owned wholesale network that provides last-mile copper and fibre connections for all operators – awarded Telstra a contract worth A$1.6 billion ($1.2 billion) to provide planning, design, construction and construction management services for the network.

Rod Sims, chairman of the Australian Competition and Consumer Commission, warned: “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.”

The contract covers an upgrade to the NBN Co’s hybrid fibre-coaxial network, which uses copper to deliver services on the final drop to customers’ premises. The network will be upgraded to 3.6 million homes by 2020.

Under the deal, Telstra will also try out fibre to the node or direct to the premises to test the feasibility and economics.

Under the original plan for the NBN, almost all homes in Australia were to be directly connected with fibre, but the project was scaled back in 2013 when the Labor government, which conceived the plan, was defeated in a general election.

The regulator said it had had “extensive and productive discussions” with NBN Co and Telstra about its concerns, and had received proposals from the companies.

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