Telstra hits regulatory hurdle in NBN deal

Dylan Bushell-Embling
31 Aug 2011

Australian regulators have thrown a spanner into the works for Telstra's plan to migrate its customers to the NBN, stating that it believes the proposal cannot be accepted in its current form.

The Australian Competition and Consumer Commission yesterday announced it would seek comment about its concerns with the proposal, as it stands, for Telstra to progressively decommission its copper and HFC networks and move its customers on to the national broadband network.

Telstra has not yet made a compliance plan to structurally separate its wholesale and retail operations by 2018 - a requirement of the deal reached with NBN Co to move its customers to the NBN, ACCC said.

This deal will see Telstra paid A$11 billion ($11.7 billion) to migrate its customers, and to provide its ducts, pits and backhaul fiber to NBN Co. The government is pushing for Telstra to separate to loosen its stranglehold over the Australian telecom market.

The ACCC added that Telstra has not made an enforceable commitment to provide its customers with services of equivalent quality and functionality to what they are currently paying for.

It also cites “serious concerns” that Telstra and NBN operating company NBN Co could have too much scope to vary the terms of their dealings without the regulator's consent.

In a market disclosure, Telstra said it would try to reach a détente with the ACCC before its AGM on October 18, when shareholders are scheduled to vote on the migration plan. If this does not happen, Telstra may still hold the vote, but would need ACCC to sign off before it can proceed.

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