Australia’s competition watchdog has formally warned NBN Co for offering materially different commercial terms to different RSPs and giving preferential treatment to Macquarie Telecom, to whom it gave pricing information on its Enterprise Ethernet offering months before other resellers.
The Australian Competition and Consumer Commission (ACCC) issued a warning to NBN Co after it emerged that the provider gave Macquarie Telecom pricing information of its Enterprise Ethernet product at least five months before its competitors.
The ACCC has now accepted a court-enforceable undertaking from NBN Co that it hopes will prevent further “distort[ion of] competition in the market”.
According to the ACCC's report, Macquarie Telecom entered into a ‘deal module’ (DM) with NBN Co in June 2018, which gave it “particular rights” to receive a number of payments known as ‘network preference payments’, which were to be mostly used for lead generation and marketing.
The DM also granted Macquarie a reduction in charges to be paid when an end-user contract was terminated or expires without renewal.
The telco was also granted access to place orders for building activities -- essentially design, planning and construction services -- at no additional cost for either Enterprise Ethernet or fibre-to-the-premise links.
According to the ACCC, NBN Co did not inform other RSPs of these building activity terms or the benefits under the ‘preferred network provider’ arrangement that Macquarie Telecom received.
“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.”
“Market feedback suggests that NBN Co’s entry into the wholesale enterprise market has increased competition, particularly in areas where Telstra is the only other fixed-line infrastructure provider,” he added.
The ACCC said it accepted NBN Co’s pledge to “ensure that all access seekers can compete on an equal footing” in the future.
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.
In a statement to ARN, an NBN Co spokesman said the ACCC investigation was a “valuable process” for a “maturing business”.
“Many of these improved processes are now in place and communicated to our retail partners, and we look forward to implementing the remaining few obligations as outlined in the undertaking and working together with the industry to provide great customer experience to businesses,” he added.