ACCC gives $800 million Optus-NBN Co deal the thumbs up

The consumer watchdog proposes to authorise the deal after weighing up the pros and cons.

The Australian Competition and Consumer Commission (ACCC) has proposed to authorise a deal which will see Optus migrate its hybrid fibre coaxial (HFC) broadband customers onto the National Broadband Network (NBN).

Optus uses its HFC cable network to deliver high-speed broadband to Sydney, Melbourne, and Brisbane. In June 2011, the telco signed an $800 million agreement with NBN Co to migrate its HFC customers to the NBN and decommission parts of the network.

The deal is subject to ACCC approval.

The consumer watchdog has issued a draft determination recommending the deals approval to avoid network duplication with the NBN and delivers a lower cost HFC subscriber migration to the $36 billion network. The ACCC acknowledged this will remove a significant competitor to the NBN in locations covered by the HFC network which could push NBN Co to improve its performance.

“The ACCC has examined these issues carefully and in great detail and a number of unique factors have reduced the detriments below that which would normally be expected,” ACCC chairman, Rod Sims, said in a statement.

Should the deal be authorised, it would mean Optus will not be burdened with maintaining the HFC network in the future.

“ACCC approval will pave the way for a genuine win-win deal, freeing up resources that can be used more effectively to open up retail competition on a single advanced network that covers the country,” Optus CEO, Paul O’Sullivan, said in a statement.

"Locking carriers into smaller-scale wholesale competition with the NBN founded on existing network platforms would never offer such nationwide benefits because existing HFC networks only cover certain regions.”

The ACCC will make its final decision once it receives feedback for the draft determination.