Lengthy NBN-ISP contract concerns ACCC

The competition watchdog has raised concerns about the National Broadband Network Company's (NBN Co's) five-year contract term with retail service providers (RSPs), as telcos delay in signing on the dotted line.

The competition watchdog has raised concerns about the National Broadband Network Company's (NBN Co's) five-year contract term with retail service providers (RSPs), as telcos delay in signing on the dotted line.

The wholesale broadband agreement (WBA) is the document that outlines the types of products and services that RSPs can access on the NBN, as well as the terms and conditions for those services. NBN Co has already tweaked the document following feedback from industry three times, and is now working on a fourth version of the agreement. In the meantime, NBN Co has extended the interim agreements with the companies that have active services up and running on the NBN until November.

The ACCC's group general manager for communications Michael Cosgrave told an NBN committee hearing yesterday that NBN Co seeking telcos to enter into a five-year agreement was "a problem".

"That poses a concern, largely because of the hierarchy stack, if I can out it that way, that exists in the legislation. This was actually a subject of debate when the legislation went through parliament. The stack effectively places access agreements at the top of the pyramid, and then a cascade below that has access to terminations and access undertakings — it might be the other way round, but various determinations by the commission," he said.

Cosgrave said that the competition watchdog was concerned that once a telco had entered into an agreement with NBN Co, they would not be able to take concerns about the agreement to the ACCC.

"The difficulty is that in the event that people enter access agreements, clearly they have no recourse to the commission. The clear intent always was that there would be a framework set by an access undertaking that would be considered and, if suitable, accepted by the commission," he said. "That access undertaking would be the framework under which access agreements were then entered into."

Cosgrave said that the ACCC hoped that it would be cleared up after further tweaking of the agreement, to a point that would meet the approval of access seekers.

Optus revealed on Monday that it would not unveil its commercial pricing for services on the NBN until it has the new document. Optus director of government and corporate affairs Maha Krishnapillai said that factors in the agreement, such as liability, would have an effect on Optus' pricing, and that it is important to bed down those details first.

"That one contract has issues around liability in certain circumstances, and that is a key risk-management issue for us — that is, once they put services in and we connect as the RSP, who is liable for putting in the service quality, if you like, in terms of the physical infrastructure in the house etc? So they are quite significant issues, and, until we get a bit more clarity on those, we are not prepared to publicly come out with pricing," he said.

Although Internode has already revealed pricing for NBN products, general manager of regulatory affairs John Lindsay said he hoped that Optus' discussions with NBN Co were successful in changing the agreement, and that this new agreement would be the same for all access seekers.

"What concerns me about the wholesale broadband agreement is that they have actually offered us a wholesale broadband agreement and asked us to sign it. But, of course, it is subject to the proviso that all of the retail service providers will end up with the same agreement. So what I would really like to understand is how, if we signed it and Optus, for instance, managed to win some concessions in the agreement, then that change in the wholesale broadband agreement would be applied to the agreement we have," he said.

Lindsay said that Telstra had attempted to stop Internode marketing NBN services on term contracts, as the agreement had yet to be finalised, but he said that he expected the agreement to be finalised in November, and that the changes would have little effect on Internode's NBN pricing.

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