Telstra no better off under HFC transition plan, government says

Telstra can now lodge revised migration plan with ACCC

The government has rejected claims that Telstra could unfairly benefit from NBN Co construction work on the telco's HFC network.

The Competitive Carriers' Coalition (CCC), which represents a number of Telstra's rivals, has argued that the telco could benefit from work by NBN Co to improve its hybrid fibre coaxial network.

Under an agreement signed in December, Telstra will progressively transfer its HFC network assets to NBN Co. HFC, along with fibre-to-the-node (FTTN), fibre-to-the-basement (FTTB) and fibre-to-the-premises (FTTP), will be part of the National Broadband Network's 'multi-technology mix' (MTM).

In a submission to a government consultation on modifying regulatory instruments that govern the progressive transfer of Telstra's customers to the NBN, the CCC argued that if it is NBN Co’s "intention to 'patch' the gaps in the HFC footprint before the ownership transfer to the extent of completing new customer lead ins, and for Telstra to be able to utilise these new lead ins to acquire new retail customers, it would, in effect, mean the taxpayer was funding an expansion of Telstra’s monopoly addressable market for HFC-based services and service bundles."

"[A] limited number of submissions expressed concern that the Definitive Agreements [between Telstra and NBN Co] permit Telstra to use all of the augmented HFC network constructed by NBN Co in circumstances where other retail service providers are not entitled to do so," a government statement issued today said.

"Telstra does not have a general right under the revised Definitive Agreements to use the augmented HFC network before other retail service providers. Instead, Telstra has a limited right to access lead-ins constructed by NBN Co within Telstra’s existing HFC footprint. In accessing those lead-ins Telstra will be no better off than if it had built the additional lead-ins itself."

The CCC's submission said that it "does not believe it is necessary for NBN Co to be completing lead in to customer premises before the ownership of the HFC network transfers".

"The lead ins should be completed only after the completion of the transfer of ownership of the HFC network. The CCC understands from its members that this would be their preferred approach from NBN Co," the CCC argued.

The government also rejected calls for Telstra's migration plan to potentially allow regulation of Telstra's HFC network by the Australian Competition and Consumer Commission.

"Industry has not sought declaration of Telstra’s HFC services in the past," today's statement said.

"In the timetable for the MTM NBN rollout there would be insufficient time for other retail service providers to develop retail products in respect of both Telstra’s HFC services and the NBN HFC network."

The government said the Telecommunications (Migration Plan Principles) Determination 2015 and the Telecommunications (Migration Plan – Specified Matters) Instrument 2015 have now been finalised, allowing Telstra to lodge a revised migration plan with the ACCC.

NBN Co's current product roadmap includes an HFC pilot in Q4 this year and a product launch in Q1 2016.

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