Having issued a draft determination on the matter back in May 2012, the Australian Competition and Consumer Commission (ACCC) has now confirmed the approval of an agreement between NBN Co and SingTel Optus for the migration of the latter’s cable subscribers to the National Broadband Network (NBN) and the decommissioning of parts of Optus’ hybrid fibre-coaxial (HFC) network.
The authorisation of the agreement comes despite concerns having been raised regarding the removal of a potential competitor to the NBN in a number of locations, with ACCC chairman Rod Sims saying of the watchdog’s decision: ‘As outlined by the ACCC at the time of the draft determination, this decision is finely balanced … In coming to its final view the ACCC took account of a substantial amount of public and confidential information in addition to submissions received from interested parties in response to the draft decision … The ACCC remains of the view that the public benefits, which are clear and quantifiable, on balance outweigh the likely detriment.’
According to the ACCC, the main public benefits of allowing the deal to progress are that the agreement will ‘avoid the cost of operating the Optus HFC network to provide a service the NBN is also able to provide’, while also reducing the cost of migrating customers currently signed up to Optus’ HFC-based services to the NBN. The regulator meanwhile does note that balanced against the benefits are negatives, including the fact that the agreement ‘removes a potentially significant fixed line competitor to the NBN in Brisbane, Sydney and Melbourne’. Further, it notes that competitive pressure from Optus and its cable network could have pushed NBN Co to ensuring performance improvements on the in-deployment fibre network. The ACCC however has claimed that that there are a number of unique mitigating factors for allowing the deal to move forward, with the watchdog noting that Optus’ HFC network is unlikely to be extended beyond its existing coverage area, which in effect would limit the potential for its subscriber base to grow.