NBN Co calls Telstra back to court over CPI adjustments

At stake is $200 million over 30 years

NBN Co has appealed a decision by the New South Wales Supreme Court that had supported Telstra’s interpretation of consumer-price-index (CPI) adjustments in the companies’ $11 billion agreement.

NBN Co lodged an appeal in the NSW Court of Appeal earlier today.

“NBN Co has carefully considered a range of factors in deciding on this course of action, including the potential impact on taxpayers of the judgment at first instance,” an NBN Co spokesperson said.

Telstra isn't backing down.

"We will continue to exercise all our legal rights in this case," a Telstra spokesperson said.

The dispute relates to the 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. The parties have disagreed over when CPI adjustments apply to the price that Telstra charges NBN Co to access its infrastructure.

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 had argued that CPI increases should take effect from 1 Jan 2012. However, NBN Co had argued 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 $200 million over 30 years.

Read more: Telstra hits back over bandwidth pricing claims

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. 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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Tags broadbandTelstralegalnbn colawNSW Supreme CourtcontractcourtNSW Court of AppealCPI adjustments

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