June court hearing set for Telstra, NBN Co dispute

Parties wanted to delay hearing until December

Telstra and NBN Co will argue contract terms before the NSW Supreme Court on 30 June, the judge in the case has decided.

The dispute relates to the $11 billion agreement in which Telstra agreed to migrate its customers to the NBN and decommission its copper network, as well as allow NBN Co access to its pits, pipes and ducts.

Specifically, the parties seek to clarify when consumer-price-index (CPI) adjustments apply to the price that Telstra charges NBN Co to access its infrastructure.

At the court this morning, NBN Co and Telstra asked Justice David Hammerschlag for an early December date for the hearing. However, Hammerschlag said he believed that a case over such an important business matter should be resolved sooner.

After conferring outside the court, the parties agreed to 30 June. Hammerschlag approved, setting a three-day hearing for that date.

It took more than four months to set a date for the hearing. The court had stood over two previous directions hearings in November and December last year.

The agreement between Telstra and NBN Co allowed for CPI increases from the first of January every year after the commencement of the agreement. However, Telstra and NBN Co have disagreed over the precise date that the agreement commenced.

The agreement was signed in June 2011, so Telstra argues that CPI increases should take effect from 1 Jan 2012. However, NBN Co argues that the agreements were only finalised in March 2012, and so the CPI start date should be 1 Jan 2013.

The difference, depending on when CPI adjustments began, is estimated to be worth more than $100 million.

An attempt at mediation between the parties failed, resulting in Telstra taking NBN Co to court.

Telstra has said that the timing of the court action is unrelated to possible renegotiation of the deal with NBN Co, "although resolving this disagreement will help provide greater certainty and as such may assist future policy discussions".

In December, NBN Co released its strategic review of the NBN, which recommended renegotiation of the Telstra contract to allow for a multi-technology approach replacing the existing fibre-to-the-premise scheme chosen by the Labor party.

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of a dystopian novel about surveillance. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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