Telstra wireless ad ban worries watchdog

Telstra wireless ad ban worries watchdog

Summary: 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.

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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."

Topics: NBN, Broadband, Government, Government AU, Telcos, Telstra

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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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Talkback

10 comments
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  • How stupid can the ACCC get? It would argue elsewhere that the wireless market is competitive. Indeed it would argue elsewhere that it would be better if the dominant fixed provider weren't also the largest wireless provider.

    The fact that Telstra won't promote wireless won't stop Vodafone and Optus doing so. And at the Telstra briefing on the agreement Thodey was pretty clear that Telstra isn't constrained from responding to the efforts of others.
    dhavyatt
    • Can't you read? If you can then you might want to try reading the article first before making comments that make you look like an idiot. Now go read the article, and pay attention to the first few paragraphs. If that is too hard I'll paraphrase it for you...

      Telstra can still advertise their wireless service, they just can't advertise it as a substitute to the NBN for 20 years.

      Maybe in 20 years Malcolm Turnbull will have invented that magic wireless technology that is going to be faster, better and cheaper than any fiber solution. Pigs might fly too...
      Jingles-8366c
  • Jingles your insulting diatribe does little to establish you as a reasonable and intelligent responder to dhavyatt.

    You must understand that it is desperately imperative that the NBNCo has no competition allowed to it to retain any semblance of financial credibility. The fact that the advertising ban was suggested for wireless, was in fact a silly and useless request without any practical result or any problem for Telstra and easily avoided.

    More serious, and an absolute travesty of all the ACCC holds dear and was created to ensure, is the fact that it completely ignores the fact that the establishment of the NBN Co creates a total monopoly without competition allowed. My question is how in all conscience, can the ACCC, under whatever circumstances or excuses allow this monopoly?
    sydneyla
  • Referring to the ACCC request for Telstra to make changes to their separation proposal (slightly off topic, apologies Josh) it is known that Senator Conroy is most anxious to have a speedy resolution of this matter and will, almost certainly, be making his feelings known (behind the scenes) to the ACCC. It think it may be more realistic for Telstra to move to serious discussion with Malcolm Turnbull considering the probable demise of the Gillard Government.
    sydneyla
  • Malcolm Turnball will say anything to get his name in the paper.

    Malcolm, you're sounding more like Tony Abbott every day.
    adam@...
  • Lol, people still think the NBN is going to help them. What's the public benefit of banning Telstra from advertising a service? Is using a non-NBN Internet connection going to be like smoking now? Are we going to have plain packaging of ISPs? Will nobody be allowed to compare themselves to the NBN or say they are better than the NBN, regardless of whether or not they actually are?

    It's quite strange that there's still diehards supporting the NBN. Woo hoo! 20+ years of internet tax!
    coolguy4
  • It'll be 20 years before LTE would be able to equal current gen fibre anyway, so all that's really asking for is "Truth in advertising"...
    Tinman_au
    • I'm surprised you guys are still going on about this. Read the news... Conroy (and ergo Quigley) will be gone within 2 years.

      btw LTE never will equal current gen fibre... however LTE Advanced already does... its introduction with upgraded ADSL2+ will be timed well to replace NBNCo FTTH rollout when the next Liberal Govt takes over. Then FTTH will be limited to those areas built by election time and new estates.
      FiberLover
      • The old political bias rears it's ugly head again.

        Is there even one NBN hater out there who is against the NBN for legitimate reasons and not just because they are a Liberal stooge?

        Didn't think so.
        Beta-9f71a
  • sydneyla and coolguy4

    Before you start bagging without knowing, the wireless advertising clause is to prevent Telstra from double dipping.

    In other words, receiving money for migrating customers to the NBN, but then gazumping the NBN and saying to customers, who they have already received money for, psst, we can offer you a wireless deal instead.

    Seems like an obvious goodwill business clause.

    So as two people who I have read comments from before, claiming you hate wastage, do you now promote wastage?
    Beta-9f71a