Multibillion Dollar Telstra NBN Deal Could Fall Apart, ACCC

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The multibillion dollar NBN deal with Telstra could fall apart if Telstra rejects a recommendation from the Australian Competition and Consumer Commission who wants to place a cap on the carrier’s wholesale broadband prices.The proposal could cost Telstra $55 Million dollars a year.

The ACCC is adamant that it will not approve the structural separation undertaking unless Telstra accepts the proposed deal.

Currently the proposed NBN deal with Telstra, which will see the Federal Government pay the carrier $11 Billion for access to their ducts and customers, is awaiting ACCC approval.

Fairfax Media reported Telstra is claiming the ACCC decision was ”unwarranted” and ”would neither promote competition nor encourage efficient investment in infrastructure”.

But ACCC commissioner Ed Willett told The Age the declaration was the only way to resolve its concerns about pricing equivalence and transparency on the Telstra network.

”If Telstra now presents us with a revised [undertaking] and makes a commitment that they are not going to challenge the ADSL declaration, and then we will be able to move to consider that [undertaking] promptly,” he said.

The ACCC’s strong stance surprised Telstra. ”Telstra is disappointed by the ACCC’s decision to declare wholesale DSL,” a spokesman said. ”Telstra does not believe that market conditions justify increased regulation of Telstra’s copper network at this time.”

The ACCC has set the interim prices of $25.40 a month in cities and $30.80 a month in regional and rural areas and will set final prices after an inquiry.

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