ACCC mulling changes to Telstra, NBN Co broadband agreements

The Australian Competition and Consumer Commission (ACCC) is looking to allow Telstra and NBN Co to make changes to their agreements related to the NBN rollout in relation to competition concerns.

The agency said it has issued a draft determination proposing to authorise the changes, specifically to agreements from 2011 and 2014, which provide the necessary legal certainty to ensure the two firms would not contravene Australian competition laws.

The proposed change comes as Telstra is set to undergo a company restructure, and is looking to incorporate its related entities into the existing agreements with the NBN through an amendment.

Telstra wants entities across the restructured Telstra group to be able to continue to give effect to their existing rights and obligations owed to NBN Co.

“In our assessment we are limited to considering the potential public benefits and detriments that flow from the restructure and not from any existing agreements,” ACCC deputy chair Mick Keogh said.

“The Telstra restructure is likely to result in some public benefits including increasing value to the shares widely held by Australian retail investors, largely by improving commercial opportunities.

“The ACCC understands that in the absence of the proposed authorisation, the Telstra Group’s restructure will not proceed, and they will be bound by existing agreements with the NBN and the statutory protections from the Telecommunications Act.”

The agency is also seeking submissions from interested parties related to the proposal before making a final decision sometime in August or September 2022.

The 2011 agreement involved the creation of NBN Co as a network builder and provider of the wholesale-only network, which included terms to enable the structural separation of Telstra Corporation through the migration of its customers to the NBN. The separation was in response to competition concerns regarding Telstra’s vertical integration in fixed-line networks at the time.

The agreement also saw amendments to the Telecommunications Act 1997 to create a statutory framework for the structural separation, including a section authorising Telstra, NBN Co and related bodies corporate in entering into, and giving effect to, the definitive agreements.

Revisions were added in 2014, which saw NBN Co provided access to certain Telstra infrastructure, the transfer of ownership of Telstra’s copper and hybrid fibre coaxial (HFC) networks to NBN Co, be required to pay Telstra fees during the migration of customers, and a fixed-line network preference commitment for Telstra to use NBN Co’s network.