NBN Co to appeal AU$200 million legal decision in Telstra fight

The legal stoush between Telstra and NBN Co over the date that inflation adjustments took effect in the 2011 agreement between the two companies is set to go on, with NBN Co today lodging an appeal of the decision made in July in Telstra's favour.

At stake is the AU$200 million that NBN Co was ordered to pay Telstra by the NSW Supreme Court, which favoured Telstra's interpretation of the AU$11 billion deal signed in 2011 giving NBN Co access to the ducts, exchange rack spaces, dark fibre links, and lead-in conduits of the country's dominant telco.

The disagreement between the two companies concerns the start date that consumer price index adjustments apply to the price Telstra charges NBN Co to access its infrastructure for the rollout of the NBN.

Telstra argued that the adjustments kicked in on January 1, 2012, after the agreement was signed in June 2011. NBN Co said the inflation adjustments came into effect on January 1, 2013, due to the structural separation undertaking that Telstra was required to submit to the Australian Competition and Consumer Commission (ACCC) that outlined how the company would separate its wholesale and retail arms, which was not accepted until March 2012.

"Telstra is entitled to declaratory relief and to a money judgment for the amount underpaid, together with interest. As at present advised, I see no reason why it should not have, as well, an order for its costs," Justice McDougall said in his July ruling.

However, the parties are now due to return to court, with NBN Co lodging an appeal in the NSW Court of Appeal today.

"NBN Co has carefully considered a range of factors in deciding on this course of action, including the potential impact on taxpayers of the judgment at first instance," a spokesperson for NBN Co said in a statement.

Telstra and NBN Co are currently in the middle of renegotiating the 2011 deal to allow NBN Co to have access to Telstra's copper and HFC assets as part of NBN Co's "multi-technology mix" model that includes hybrid fibre-coaxial (HFC) and fibre to the node, in addition to the existing fibre to the premises, fixed wireless, and satellite services.