NBN Co lodges appeal over inflation adjustment start date decision

29 Aug 2014

A legal tussle between Australian fixed line incumbent Telstra and NBN Co, the company overseeing the National Broadband Network (NBN) project, continues to rumble on. ZDNet Australia reports that NBN Co has lodged an appeal against a July 2014 decision related to the date from which consumer price index adjustments should apply to the price Telstra charges NBN Co to access its infrastructure. With matters of pricing having formed part of the definitive agreements signed between Telstra, NBN Co and the Commonwealth Government in June 2011 for the former’s participation in the rollout of the NBN, the parties have differed in their interpretation of some these terms. As such, Telstra has contended that the adjustments should have taken effect on 1 January 2012, while NBN Co has argued that the price changes should not have been made until a year later, due to the fact that Telstra’s Structural Separation Undertaking (SSU) – which outlined how the telco would separate its wholesale and retail arms – was not accepted by the Australian Competition and Consumer Commission (ACCC) until February 2012.

With the decision in July favouring Telstra’s interpretation of the inflation adjustment terms, NBN Co was ordered to pay the telco AUD200 million (USD187 million), with Justice McDougall noting in his ruling: ‘Telstra is entitled to declaratory relief and to a money judgment for the amount underpaid, together with interest. As at present advised, I see no reason why it should not have, as well, an order for its costs.’ Now, however, with NBN Co having opted to challenge that decision in the New South Wales Court of Appeal, a spokesperson for the company was cited as saying: ‘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.’

Australia, NBN Co, Telstra (incl. Belong)