NBN Co has been hit with a formal warning from the competition watchdog following a “serious breach” of non-discrimination rules.
The Australian Competition and Consumer Commission (ACCC) revealed on Wednesday it had issued the warning and entered into a court-enforceable undertaking with NBN Co over the breach, which involved the company playing favourites with retail service providers (RSPs) during the rollout of its business services.
As a supplier of wholesale services, NBN Co is prohibited from discriminating between RSPs. But the ACCC found that from at least January 2018, the company offered “materially different commercial terms” to different telcos as it was in the process of upgrading the National Broadband Network infrastructure to support its new high-speed, business-grade services.
The competition watchdog also found that NBN Co provided Macquarie Telecom with indicative pricing for the new business service five months before this was given to rival telcos.
“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.”
In June last year NBN Co announced its new wholesale business-grade product and service offerings, aimed at telcos supplying services to large companies and government entities. These services included Enterprise Ethernet, which supports very high-speed symmetrical data services.
The watchdog found that in January 2018, NBN Co provided Macquarie Telecom with indicative pricing for the Enterprise Ethernet product, but did not reveal these details to rival telcos until late May.
Sims said the actions amounted to a significant breach of the government owned enterprise’s own non-discrimination rules, despite boosting competition overall.
“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 said.
“Despite this, the ACCC is satisfied that NBN Co’s conduct amounted to a serious breach of its non-discrimination obligations. The undertaking we have accepted from NBN Co is intended to ensure that all access seekers can compete on an equal footing going forward.”
Sims said there is no evidence that this conduct lead to “specific harm or competitive detriment”.
The ACCC said it has also accepted a court-enforceable undertaking from NBN Co, which includes commitments that NBN Co will take a number of measures to ensure this discriminatory conduct is not repeated.
In response, NBN Co pledged to give the same information to all its customers at the same time, will put in place extensive compliance arrangements and conduct annual audits of its compliance with its non-discriminatory obligations.
The warning provides “clarity and certainty”, an NBN Co spokesperson said. “The undertaking helps give certainty to both NBN Co and the market about the way we build our network and how Australian businesses can benefit.
“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.”