Amendments turn NBN Co into a retailer: Turnbull


Shadow Communications Minister Malcolm Turnbull yesterday issued a sharp warning that an extensive package of amendments to key National Broadband Network legislation published by the Federal Government yesterday made a mockery of the claim that NBN Co would be a wholesale-only player in the telecommunications market.

In a statement yesterday, Communications Minister Stephen Conroy said the amendments would underpin the Government’s vision of uniform national wholesale pricing for access by telcos to NBN infrastructure.

“By requiring that new fibre networks which serve residential and small business premises and built after 1 January 2011 to supply services on an open access, wholesale-only basis, like the NBN, will mean people can have access to the same high-quality broadband services in terms of performance and retail competition, regardless of the network provider,” said Conroy.

The amendments also exempt transactions under NBN Co’s deal with Telstra from state and territory stamp duty taxes.

However, industry newsletter Communications Day this morning analysed the amendments as providing the Communications Minister of the day with “wide-ranging powers of exemption” in relation to non-telco companies such as energy utilities who wanted to buy services directly from NBN Co, and a watering down of the Australian Competition and Consumer Competition’s powers.

Turnbull wrote on his web site yesterday that the Government had made it “crystal clear” that it was its intention for NBN Co to be able to provide services directly to large companies and Governments. “As a matter of policy,” Turnbull said of the Federal Government, “it wants the NBN to be able to deal directly with any company who wishes to acquire a layer 2 bitstream service for its own purposes.”

“This makes an absolute mockery of the claim NBN is a wholesale provider of telecommunications services,” said Turnbull. “It would mean that the private sector telcos would run a very real risk of being limited to the small business and residential markets.”

“NBN will therefore not only be a monopoly of fixed line infrastructure, but also in practical terms a monopoly provider of telecommunications services to corporates and Government, thereby depriving the private sector of a large part of their business.”

The Opposition is seeking amendments to the NBN legislation which would ensure that NBN was solely a wholesale entity. “To that end we have proposed an amendment which would provide that the NBN must not supply a service to another person unless that person is a carrier or service provider and will use the service to supply a service to the public,” said Turnbull.

Image credit: Hans Thoursie, royalty free


  1. Actually, for once, this is an ammendment I think I agree with.

    But I was under the understanding that this was already part of the legislation so I’m a little confused.

    Anyone actually read the bill being put to the houses or know where/if I can obtain a copy?

  2. Malcolm has surely read the report from the Senate Environment and Communications Committee, right?

    The power exists already in EXISTING legislation – (ie: Telecommunications Act 1997) – to prevent the behaviour he is describing.

    All that has to happen is that the carrier licence for these entities be claused to say that can’t on sell services to the public.

    Why legislate for a power that already exists in legislation? The committee recognised this power, and described it as adequate protection.

    • Actually, from the quotes in the article, it looks like Malcolm wants the government to require utilities/etc to go through retail providers to get their layer 2 services. Never mind that retail ISPs (even the big ones) would not be set up for the kind of access the utilities are after.

      Talk about wealth redistribution.

      • The Telco Act lets them do that as well. The carrier licences held by the utilities could easily be varied to state where they can and cannot obtain such services.

        The Act gives the minister responsible that direct power. Whether that be Conroy right now, or Turnbull in the future. If Turnbull wants it that way, and he becomes the communications minister one day, he can have it that way.

        The power exists.

  3. In a similar way to Dodo who right now has already commenced selling utility services, electricity and gas.

    The utilities and ANY company with a significant (who knows how little that number maybe) customer base, it is intended will be able to buy from NBNco and on sell services.

    Be they supermarkets, banks, utilities, University’s, Insurance co. or anything else in ANY other industry.

    They will first satisfy there own requirements for links between their hundreds or more branch’s or sites.

    Saving many millions of dollars on their own requirements as a minimum and the opportunity to make more money and take even more market share from the traditional telco industry.

    Whether they need a carriers license to do so is a negligible minor point. That requirement will be met.
    Whatever new conditions are required to be a buyer from NBNco.

    Perhaps anyone with a large enough family trust may find it worthwhile ;-)

    • You’re right in that anybody who wants to hold a carrier licence, and who stumps up the fee, can get a carrier licence.

      I don’t think they are interested in stopping anyone who wants to be a carrier from being carrier – after all, this is about promoting competition in the retail market.

      The Special Access Undertakings required for the utilities to use NBN Co for services internally requires ACCC oversight, and if the ACCC thinks it will harm competition, they’ll knock it on the head.

      The ACCC has a LOT of power in regards to the NBN and how it rolls out – and should.

  4. Um… Most large businesses can buy products and services wholesale…

    This is no different.

  5. @M.W.

    It wont be a matter for the ACCC, as it will not be an Anti competitive issue but a Hyper competitive issue . . . .

    for the traditional telco player whose available market will shrink by the customers who will be withdrawing

    from the market to become market competitors themselves.

    p.s. The Govt may need a 2nd or 3rd Telco Ombudsman !

    • Huh?

      A = Australian
      C = Competition and
      C = Consumer
      C = Commission

      They deal with all matters regarding competition in the economy – whether they are repressive or expressive towards the level of competition.

      • Yes thats right MW thats what the ACCC stands for. Good Boy, pat yourself on head.

        The legislation that goes through parliament is what the ACCC rules by.

        So if the legislation makes it ok to either rape and pillage or NBNco to sell retail or any other condition rational or stupid then thats what the ACCC is guided by. Until and if another govt changes it, if it can.

  6. God help us all for Heavens sake gey on and build the thing but just make sure that the NBN is Wholesale only.

  7. I seriously don’t understand why the Lib’s are making a big deal out of this, one day they are complaining we need more competition in Australia and then the next they are trying to limit competition. So what if NBNco can sell directly to corporations – if it makes the wholesale telco’s sell at a more reasonable rate why are we not rejoicing? Outside of TPG’s $599 100Mbps FTTH all other wholesale RSP’s are being gouged extortionately, up to $60,000 for 100Mbps – no wonder some special interest groups are kicking up a stink, they want to keep this business model.

    • Of course, if you knew what you were talking about, you would realize that corporate fiber links are so expensive because they give basic guaranteed QoS on very high speeds (100/100)+

      NBNCo may offer 100/100 (well actually they don’t but we will use 100/40 instead), but if their users constantly download unlimited amounts of data all day, every day, well lets just say that $60000 will end up looking cheap compared to the extortionate CVC charges + cost of international backhaul that such usage will incur ;)

      This is an incredibly legitimate concern, NBNCo should be strictly wholesale only. I said it before and I said it again, if utilities/government corporations want services from NBNCo they can get a carrier license or use an RSP/ISP

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