Telstra wireless ad ban worries watchdog

Telstra's agreement to not promote wireless as a substitute for the National Broadband Network (NBN) as part of its $11 billion deal with the company "doesn't look good", according to the Australian Competition and Consumer Commission (ACCC) chair Rod Sims.

In the definitive heads of agreement between NBN Co and Telstra, the telco has agreed not to promote wireless services, such as its long-term evolution (LTE) network, as a substitute for the NBN's fibre fixed-line service for a period of 20 years. Telstra will also forfeit any payments for disconnecting services at a premises if that premises does not take up an NBN connection, and someone in that premises proceeds to contract with Telstra for a wireless service.

Sims told ABC Radio National this morning that this clause "doesn't look good" to the competition watchdog, and could potentially be bad for competition in the telecommunications industry, but added that the regulator would wait to see what stakeholders say in response to the ACCC's discussion paper.

"When you're looking at wireless, you do have to think about whether wireless can be an effective competitor to the NBN," he said. "We need to just make sure that what Telstra and the NBN have agreed to in that agreement is not anti-competitive as far as wireless is concerned."

In the ACCC's discussion paper, it notes that whether this obligation will stifle competition will depend on how restrictive the advertising would have to be, and whether forfeiting the NBN payment in some premises would have a negative impact on Telstra's ability to compete in the wireless market.

While this is a concern, Sims said that the dominant concern for the ACCC is Telstra's commitment to providing equivalent wholesale services between its retail arm and retail competitors in the intervening 10-year period as the NBN rolls out and the copper network is decommissioned.

"I think the key focus should be trying to get what is in front of us right. This is something that is capable of resolution," he said. "There is some serious work to be done, but it is all solvable, I think."

Shadow Communications Minister Malcolm Turnbull yesterday labelled the ACCC's concerns as proof that Communications Minister Stephen Conroy had been cutting corners in the NBN roll-out.

"In pursuing these policies, Senator Conroy once again put the political interests of the Government and the ALP ahead of the national interest," he said in a statement. "The ACCC rightly called him on this. It is now up to NBN Co, Telstra and the Government to address the ACCC's concerns."