NBN, telcos caught in ACCC tug of war

NBN Co has moved to assure retail service providers (RSPs) that the Australian Competition and Consumer Commission (ACCC) will be able to mediate contract negotiations between itself and the telcos.

NBN Co's special access undertaking (SAU) sets out how the company will operate in the fixed-line regulatory environment for the next 30 years. It is designed to work hand in hand with the shorter-length wholesale broadband agreements (WBAs) that retail service providers like Optus and iiNet will sign to provide services over the National Broadband Network (NBN).

Optus, Macquarie Telecom, Vodafone and others had warned that the SAU would limit the ability of the ACCC to intervene in disputes over the WBAs. In a submission to the ACCC's review of the SAU, NBN Co said that under the SAU, in the course of negotiating the agreement, either the access seeker or NBN Co can notify the ACCC to intervene and review pricing or other conditions that the parties can't agree on. The ACCC would, after the review, accept one of the parties' stances to be included in the WBA.

But Macquarie said in a supplementary submission that it remains concerned that under the SAU, there is no possibility to seek ACCC recourse once an agreement has been entered into. Optus made similar comments in its own submission. iiNet's chief regulatory officer Steve Dalby told ZDNet Australia that under the current framework, the WBA would always override any ACCC determination once the WBA has been signed.

Providers felt hurried into signing the WBAs, because, if they didn't, then new customers wouldn't be able to take up services. Since ACCC intervention generally takes a long time, this wait could damage telcos' profits.

"I can call on the ACCC prior to signing the WBA, but if I do that ... and you know these things take years to resolve ...I'm sitting on the sidelines unable to take supply," he said. "I'm caught between the devil and the deep, blue sea."

Most service providers have now signed a one-year interim agreement with NBN Co to enable them to offer services within the first release sites for the NBN.

NBN Co will look to get five-year contracts locked down for the next agreement, but Dalby said he will be seeking to ensure that the future agreement allows ACCC intervention after it has been signed on the dotted line.

"If there are regulatory issues I have with that current WBA, I can't now get ACCC determinations on that interim agreement. That's done and dusted, and I have to suck it up and live with that agreement as it stands," he said. "The next longer-term agreement that I might sign — I should not sign it until I have the regulatory oversights."

Dalby said that iiNet and other access seekers would also like to see the length of the SAU reduced from 30 years.

"To lock us [in] for 30 years is just cuckoo-land stuff," he said. "Our industry didn't exist 30 years ago; the internet didn't exist 30 years ago. What's the environment going to be like in 10 years' time? Nobody knows.

"We don't want the ACCC to be sidelined for 30 years. We want them to have the role that they've been set up to take."