NBN Co must pay out $200 million more to Telstra: NSW Supreme Court

NBN Co could appeal decision, must decide by 14 August

NBN Co will owe Telstra $200 million more than it expected over the next 30 years, unless it appeals a decision reached today by the NSW Supreme Court.

Justice Robert McDougall handed down the decision after oral arguments earlier this month.

“NBN Co has until 14 August to lodge an appeal, and is considering its options,” said an NBN Co spokesperson.

The dispute relates to the $11 billion agreement in which Telstra agreed to migrate its customers to the NBN and decommission its copper network, as well as allow NBN Co access to its pits, pipes and ducts.

Specifically, the parties sought to clarify when consumer-price-index (CPI) adjustments apply to the price that Telstra charges NBN Co to access its infrastructure.

The agreement between Telstra and NBN Co allowed for CPI increases from the first of January every year after the commencement of the agreement. However, Telstra and NBN Co have disagreed over the precise date that the agreement commenced.

The agreement was signed in June 2011, so Telstra had argued that CPI increases should take effect from 1 Jan 2012. However, NBN Co had argued that the agreements were only finalised in March 2012, and so the CPI start date should be 1 Jan 2013.

The difference, depending on when CPI adjustments began, is estimated to be worth $200 million.

“We welcome this decision which upholds our interpretation of the agreements,” a Telstra spokesperson said.

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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