Australia’s troubled national broadband network falls foul of competition regulator

Australian consumer watchdog, the ACCC warns NBN Co over breaches of competition rules

AUSTRALIA’S COMPETITION REGULATOR FINDS THE TAXPAYER FUNDED NATIONAL BROADBAND COMPANY BREACHED COMPETITION RULES

NBN Co has been given a formal warning by the ACCC for discriminating between retail service providers for the supply of broadband infrastructure to business customers

9 October 2019 | Staff Writers

Australia’s national broadband internet infrastructure provider, NBN Co has been made to provide a court-enforceable undertaking to the Australian Competition and Consumer Commission (ACCC) after NBN Co was found to have breached its obligations to the regulator.  

The Australian taxpayer funded NBN Co has been accused of delivering advantage to a Retail Service Provider (RSP) by giving it pricing information that it had not disclosed to that company’s commercial rivals.

In a statement the competition watchdog said, “The ACCC is satisfied that from at least January 2018 NBN Co offered materially different commercial terms to different RSPs as it upgraded NBN infrastructure to support high-speed, business-grade services.

“NBN Co also provided one RSP with indicative pricing information for its new Enterprise Ethernet service months before it gave the same information to other RSPs.”

Media reports say that NBN Co selectively delivered this information to one re-seller, the ASX-listed Macquarie Telecom Group which has seen its share price rise by 1,250% since the launch of NBN a decade ago.  

The ACCC reported that NBN Co admitted to not having appropriate processes in place to ensure it was complying with its transparency and non-discrimination obligations.

“The ACCC has concluded that NBN Co failed to comply with its non-discrimination obligations on a number of fronts,” ACCC Chair Rod Sims said.

“These legal obligations were enacted to ensure that NBN Co does not distort competition in the market for retail NBN services, such as by favouring larger RSPs.”

As part of the court-enforceable undertaking, NBN Co has committed to offering consistent contract terms to RSPs for the supply of upgraded NBN infrastructure.

NBN Co has also committed to giving the same information to its customers at the same time. It will put in place extensive compliance arrangements, including an annual independent audit of its compliance with its non-discrimination obligations.

“We will be closely monitoring NBN Co’s conduct under the enforceable undertaking, and reserve our right to take further action if we are not satisfied,” Mr Sims said.

Launched in 2009, NBN Co has suffered numerous problems from failed budget projections, to botched infrastructure rollout, major technical problems, senior management changes and a large number of consumer complaints. Conceived by the Rudd Labor Government, successive Liberal Governments have maintained that Labor committed $43 billion in taxpayer funding to a project that did not have a business plan.

Despite NBN Co and government promises of cutting edge broadband, Australian internet download speeds are below the international average and seriously lag in the Asia Pacific region. The average download speed in Australia is half that of New Zealand, while Singapore, Hong Kong and South Korea all enjoy internet speeds three times faster than Australia.

0