Feeds

ACCC set to okay Optus HFC exit

Monopoly concerns outweighed by consumer benefits, apparently

Bridging the IT gap between rising business demands and ageing tools

Optus will exit the HFC business and pocket $AU800 million, if yesterday’s proposed determination from the Australian Competition and Consumer Commission stands.

The draft determination from the ACCC would allow Optus to pass its HFC customers to the National Broadband Network as it rolls out, and once the rollout is complete, to decommission the network, which has a footprint in Brisbane, Sydney and Melbourne.

Calling the decision “finely balanced”, the regulator decided that the NBN handover would avoid the cost of operating the HFC network in competition with the NBN and reduce the cost of migrating HFC subscribers to the new fibre-to-the-home infrastructure.

Although the Optus-NBN Co deal reduces competition, the ACCC also noted that Optus is unlikely to extend its network beyond its current footprint, and with the NBN as its competitor, is unlikely to stump up the capital required for future upgrades to the HFC infrastructure.

The ACCC also noted that Optus’ services would only compete with the NBN “at the lower end of the range of services that the NBN will support”.

Moreover, the ACCC’s statement notes, should Optus lose too many customers to the NBN, its HFC network would become uneconomic to operate.

In a more optimistic era, Optus used to trumpet its network as passing more than two million homes. However, many of those are unserviceable (mostly because Optus does not offer HFC to apartments or other ‘multi-dwelling units’), leaving only 1.4 million homes able to be connected. Of those, fewer than 500,000 are connected, with around 400,000 taking a broadband service.

The network has suffered overbuild in the past – during the 1990s, Optus was shadowed practically house-by-house as Telstra rolled out its own HFC cable. That battle finally ended in the early 2000s when both carriers halted their rollouts and wrote down the networks’ book value.

Although now operating DOCSIS 3.0 technology, the two cable networks have themselves represented a competition sore point, with providers like Internode criticizing their lack of wholesale broadband access.

Communications Day is reporting that the "last man standing" in the HFC business, iiNet-owned TransACT, remains hopeful that it can secure a similar deal and avoid overbuild of its networks in the ACT and regional Victoria. ®

The Essential Guide to IT Transformation

More from The Register

next story
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
Bring back error correction, say Danish 'net boffins
We don't need no steenkin' TCP/IP retransmission and the congestion it causes
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Telstra to KILL 2G network by end of 2016
GSM now stands for Grave-Seeking-Mobile network
Seeking LTE expert to insert small cells into BT customers' places
Is this the first step to a FON-a-like 4G network?
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.