The ACCC has issued a draft determination proposing to authorise Telstra and NBN Co and their related entities to amend agreements that they entered into from 2011 and 2014 which facilitated the rollout of the national broadband network.
The existing agreements, authorised under statute, provide the necessary legal certainty that certain conduct would not contravene Australian competition laws. This conduct is not the subject of any previous or existing ACCC authorisations.
The Telstra Group is proposing to undertake a restructure of its organisation and is seeking to incorporate its related entities into the existing agreements with the NBN through an amendment.
Under the proposed authorisation, entities across the restructured Telstra group will be able to continue to give effect to their existing rights and obligations owed to NBN Co.
“In our assessment we are limited to considering the potential public benefits and detriments that flow from the restructure and not from any existing agreements,” ACCC Deputy Chair Mick Keogh said.
“The Telstra restructure is likely to result in some public benefits including increasing value to the shares widely held by Australian retail investors, largely by improving commercial opportunities.”
“The ACCC understand that in the absence of the proposed authorisation, the Telstra Group’s restructure will not proceed, and they will be bound by existing agreements with the NBN and the statutory protections from the Telecommunications Act,” Mr Keogh said.
The ACCC is now seeking submissions from interested parties in relation to its draft determination before making a final decision in August/ September 2022.
Further information is available on the ACCC’s public register.
In 2011, the then Australian Government announced the creation of NBN Co to build and operate a wholesale-only, open access national broadband network (NBN). The rollout of the NBN also enabled the structural separation of Telstra Corporation through the migration of its customers to the NBN. This structural separation was in response to longstanding competition concerns arising from Telstra Corporation’s vertical integration in fixed-line networks.
In November 2010, the Government introduced a suite of amendments to the Telecommunications Act 1997 (Cth) that created a statutory framework for the structural separation. These amendments included section 577BA, which authorised conduct by Telstra Corporation, NBN Co and NBN Co’s related bodies corporate in entering into, and giving effect to, the Definitive Agreements.
The Definitive Agreements were executed in 2011 and revised in 2014:
- Providing NBN Co with access to certain Telstra Corporation’s infrastructure.
- Providing for the transfer of ownership of Telstra Corporation’s copper and hybrid fibre coaxial (HFC) networks to NBN Co.
- Requiring NBN Co to make payments to Telstra Corporation as Telstra Corporation progressively disconnects customers from its legacy copper fixed-line network and broadband customers from its HFC network.
- Including a fixed-line network preference commitment for Telstra Corporation to use NBN Co’s network.