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 , stating that the telco's structural separation undertaking could not be accepted in its current form and important changes were required.