ACCC approves revised deal between nbn and Optus

28 Aug 2015

A revised agreement between nbn (formerly NBN Co), the company overseeing Australia’s National Broadband Network (NBN) project, and Optus has been given the nod by the Australian Competition and Consumer Commission (ACCC). Confirming its final decision, which follows a draft ruling in July 2015, the regulator revealed that it would not oppose nbn’s proposed acquisition of Optus’ HFC network. Explaining the reasoning behind its decision, the ACCC said it had accepted that in the absence of the revised arrangements the two parties involved would have relied upon their original arrangement, under which Optus would have ultimately decommissioned its HFC network.

The revised arrangements involve the progressive migration of Optus’ HFC subscribers to the new multi-technology NBN platform, while parts of the operator cable infrastructure are to be integrated into the NBN. In addition, the agreements also include an obligation on Optus to use the NBN for 15 years, as well to share spectrum on its coaxial network with nbn prior to the latter taking ownership of that network. Such arrangements form part of a broader transaction between the parties which involves the acquisition of Optus’ HFC assets, and this meant the ACCC had to assess the proposed arrangements under two separate processes – the authorisation provisions of the Competition and Consumer Act 2010 (the Act) and its informal merger review process. Under the authorisation process, the ACCC assesses the likely public benefits and detriments generated by proposed ant-competitive conduct. In contrast, assessing a proposed acquisition of assets requires the ACCC to consider the impact on competition, but not public benefits.

Commenting on the development, ACCC chairman Rod Sims noted: ‘The ACCC acknowledges the broader proposal for NBN Co to acquire Optus’ HFC network assets will allow it to utilise existing HFC infrastructure in rolling out the NBN, which is likely to generate cost savings.’