Could CBA and BHP become ISPs?

Summary:Australia's fourth largest ISP, iiNet, yesterday raised concerns that if left in its current form the draft National Broadband Network (NBN) legislation could allow any corporation to become a wholesale customer.

Australia's fourth largest ISP, iiNet, yesterday raised concerns that if left in its current form the draft National Broadband Network (NBN) legislation could allow any corporation to become a wholesale customer.

iiNet's regulatory affairs manager Steve Dalby raised the concern at yesterday's Senate hearing in Melbourne while arguing for a clearer definition of wholesale services under the NBN.

"It would be very easy for any big corporate in Australia to set up a small team internally, buy a $10,000 carrier licence, declare itself a telecoms company, and rock up to NBN Co saying that they want to start buying services," Dalby said.

"Their intention would only ever be to have those services for their own consumption. There's a lack of clarity in that area of the draft, and that clarity hasn't improved over the past few months."

Dalby also argued for a clearer definition of wholesale services, noting that current provisions of the NBN legislation allow NBN Co to offer retail services in certain circumstances and wouldn't bar a private company from setting up its own "wholesale" arm to gain access to wholesale pricing.

Optus director of government and corporate affairs Maha Krishnapillai, who also fronted the committee, reiterated concerns that the current draft legislation wasn't clear enough in clarifying the retail question.

Maha Krishnapillai

Maha Krishnapillai(Credit: David Braue/ZDNet.com.au)

"We remain deeply concerned that these Bills signal a significant step back from the government's clear commitment to operating NBN Co as a wholesale-only provider," he said, noting that potential retail deals by NBN Co are "a real threat to Optus and other carriers who have significant government contracts."

"We don't want to replace one monopolist, Telstra, with an even more powerful, better-resourced, and better-backed monopolist," said Krishnapillai.

Asked by Senator Macdonald whether Optus would expect all telcos to benefit from any pricing concessions made by NBN Co to Telstra, Krishnapillai shared Dalby's concerns over the potential availability of volume-based discounts. "Being the second largest volume player in the sector, we'd actually be a beneficiary of such legislation," he explained.

"But we're saying there should be open, transparent and genuine open-access principles. We're not looking for special footing for ourselves, Telstra or anyone. And if a chunk of money is in effect parlayed to Telstra as a ransom prize, that should not be allowed to be used to distort retail competition."

Topics: NBN, Broadband, Optus, Telcos

About

As large as the US mainland but with a smaller population than Texas, Australia relies on ICT innovation to maintain its position as a first-world democracy and a role model for the developing Asia-Pacific region. Award-winning journalist David Braue has covered Australia’s IT and telecoms sectors since 1995 – and he’s as quick to draw le... Full Bio

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