ACCC approves Optus HFC deal

Summary:The Australian Competition and Consumer Commission has approved decommissioning Optus' Hybrid fibre-coaxial network, on the grounds that the competitive benefits soon won't be relevant to the NBN.

The Australian Competition and Consumer Commission (ACCC) has ruled in favour of decommissioning Optus' Hybrid fibre-coaxial (HFC) network, and transitioning its customers on that network to the NBN.

The ACCC's stance was that benefits to the public outweigh the detriments, and Optus' HFC network is not likely to survive in a post-NBN Australia.

The ACCC stated that, although Optus' HFC network could provide healthy competition to the NBN, this benefit was likely only to be short term. It said that it was unlikely that Optus would extend its HFC beyond its reach of 1.4 million homes, nor would it invest in the technology necessary to compete against the NBN. Due to this speed limitation, the ACCC saw that Optus' HFC network would only bring competitive advantages to customers that were interested in the NBN's slowest services.

Additionally, the ACCC stated that, given the likelihood that Optus HFC customers will demand faster speeds over time, they would be likely to naturally migrate to the NBN, meaning that "the Optus HFC network would be uneconomic to operate once a critical mass of customers were lost".

The demise of Optus' HFC network would also be accelerated by NBN Co's need to encourage high-speed plans in order to become economically viable. The ACCC stated that NBN Co would only be able to fully recover the costs of its investment if it sold the higher value services and, as such, it would have an incentive to keep costs of those services at an efficient level.

NBN Co welcomed the agreement, stating it showed that the telecommunications industry was changing.

"This marks a shift from the past where a number of companies used their resources to duplicate network access infrastructure," NBN Co CEO Mike Quigley said in a statement.

"Today's final decision by the ACCC marks a further move towards a new industry structure, in which open access to the NBN will allow any telecommunications and internet service provider the opportunity to offer a service to any customer via either fibre, fixed wireless or satellite."

Topics: NBN, Broadband, Optus, Telcos

About

A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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