ACCC gives draft tick to Optus NBN deal

Summary:The Australian Competition and Consumer Commission (ACCC) has issued a draft determination, approving the $800 million deal between NBN Co and Optus, to migrate Optus' Hybrid-Fibre Coaxial (HFC) customers onto the National Broadband Network (NBN).

The Australian Competition and Consumer Commission (ACCC) has issued a draft determination, approving the $800 million deal between NBN Co and Optus, to migrate Optus' Hybrid-Fibre Coaxial (HFC) customers onto the National Broadband Network (NBN).

The deal, announced in June last year, will see Optus' 400,000 HFC customers in Brisbane, Melbourne and Sydney moved onto the NBN fibre, beginning in 2014.

The ACCC had raised concerns that the deal would remove competitive pressure in these areas for NBN Co, but Optus reassured the ACCC in January that it had no intention of offering wholesale services over, HFC upgrading the HFC to provide speeds higher than 100 megabits per second or extending the network further than the 1.5 million premises it covers today. It also said that the cost of operating the network would make it tougher to compete with NBN Co.

ACCC chair Rod Sims said that the ACCC accepted that Optus would not upgrade the HFC network, and that, over time, customers demanding higher speed services would have naturally migrated to the NBN anyway.

Sims said that on closer examination, the HFC network wouldn't have had much impact on NBN competition because of the regulatory environment set up around the NBN.

"For example, the regulatory approach, which will ultimately apply to the NBN, is intended to provide strong incentives for NBN Co to promote utilisation of the NBN, and to be responsive to customer's needs concerning speeds and other aspects of service quality."

Following the issue of the draft determination, the ACCC will test its views with NBN Co and Optus, as well as the industry, before issuing a final determination.

On Thursday, Communications Minister Stephen Conroy indicated that, while the Optus deal will allow for the quicker migration of customers onto NBN services, it will ultimately push up the cost of the NBN slightly above the initial forecast of $35.9 billion. It is expected that this will be outlined in the revised corporate plan, which is to be handed to government by NBN Co this week.

Topics: NBN, Broadband, Optus, Telcos

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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