Wholesale telco Vocus Communications has raised concerns that Telstra’s $11 billion deal with NBN Co could result in competing telcos being evicted from Telstra’s ducts in order to hamper competition.
In a submission to the Australian Competition and Consumer Commission’s (ACCC) discussion paper on Telstra’s structural separation plan, the company suggested Telstra would use its control to favour its own retail business unit to impede competition.
“There is potential for both Telstra and NBN Co to engage in discrimination in relation to facilities access, including Telstra’s ducts where space is frequently scarce,” the submission reads. “Telstra’s past and current practices strongly suggest that Telstra will use its control of this infrastructure to impede competition.”
According to the wholesaler, Telstra’s duct charges are “excessive” but continue due to the lack of an alternative.
Despite Telstra currently being required to provide carriers with access under the Telecommunications Act, Vocus alleges that Telstra's ownership of the network places it at an advantage and summaries of its deal with NBN Co have been insufficient in explaining the details of the ducts’ future use.
“Telstra's duct lease to NBN Co is clearly relevant to assessing the likelihood of whether existing carriers will be evicted from Telstra’s ducts, though as the deal documents are not public we are uncertain to what extent,” the document reads. “Any negative impact on other carriers whereby Telstra demands that a carrier remove its cables to make way for the NBN will depend on the amount of free space in the relevant ducts.”
According to the wholesaler, it will be directly affected by the locations where ducts have limited capacity, most notably in South Melbourne where it has cables installed. In order to assess the availability of space in such ducts, a physical inspection would be required, which would be “a vast undertaking”, the submission reads.
The submission also noted areas in Melbourne’s Brunswick where the majority of underground duct was blocked and unusable.
“If this is widespread, then there appears to be a reasonable likelihood that there will be areas where there is insufficient space in the ducts for NBN Co’s cables unless other cables are removed,” the submission reads. “We consider it unlikely that Telstra will be removing any of its own cables where they can remain in use, and as such cables belonging to other carriers may be forcibly removed.
“This would have a seriously deleterious effect on existing arrangements, impact business continuity and the ability of existing competing carriers to continue to provide services.”
The ACCC last month cast doubt on the deal, stating that the telco’s structural separation undertaking could not be accepted in its current form and important changes were required.
“The preliminary view is that the structural separation undertaking that has been provided does not address legislative requirements,” ACCC chairperson, Rod Sims, said at the time.
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