NBN legislation 'deeply worrying': Optus

Summary:Optus has taken a sledgehammer to the Federal Government's proposed National Broadband Network legislation in flaming hot submissions to the Senate NBN committee, describing the option for the NBN Company to provide retail services as "deeply worrying".

Optus has taken a sledgehammer to the Federal Government's proposed National Broadband Network legislation in a flaming hot submission to the Senate NBN committee, describing the option for the NBN Company to provide retail services as "deeply worrying".

In exposure drafts of legislation related to the NBN Co released in late February, the Federal Government left the door open for the company to supply services directly to government agencies in a move that ran contrary to its stated aim for the company only to provide wholesale services.

In a submission to the Senate Select Committee on the NBN, which was recently published online, Optus said the draft legislation provided NBN Co with "significant scope to operate as a retail service provider of telecommunications or content services", either through direct remit by the communications minister of the day or through acquiring other companies and establishing subsidiaries.

"This represents a significant and worrying step back from the government's clear commitment to operate the NBN Co as a wholesale-only provider when it announced its NBN plans on 7 April 2009," Optus said.

The telco described arrangements for private ownership and control of NBN Co as "wholly inadequate", raising the possibility that a retail telco could gain a controlling stake in the currently government-owned company. "Essentially, this is an issue that is left to be determined by the minister at a later date," said Optus.

The nation's number two telco also had further concerns. One of them was that arrangements for the NBN Co to treat telcos equally were not sufficient.

"As it stands, Telstra could potentially negotiate special prices in return for an agreement to migrate its 8 million customers to the NBN — it is unlikely that any other carrier would qualify to receive those same terms," wrote Optus.

The telco said if the issues were not addressed, it would be "highly questionable" if the government's NBN vision — which included a competitive telco sector — would be realised, especially given that telcos would be unlikely to commit to the NBN while the possibility remained of it operating as a retail service provider.

Telstra too, has previously said it was concerned about the NBN's potential to act as a retail telco.

"Such an outcome would run counter to the core purpose of the NBN and the government's primary policy objective of restructuring the industry to have separate providers for retail and wholesale fixed network services," said the telco in a letter released in early March under the names of its chief executive David Thodey and chairman Catherine Livingstone.

In its own submission, smaller telco Primus also questioned the retail option for the NBN Co, requesting the government clarify when the minister could make an exemption for the NBN Co to provide retail services.

"Primus suggests the government establish specific criteria or guidance around the making of such a determination," it wrote. The telco also wanted appropriate rules laid out to guide NBN Co's future ownership arrangements, and clarification around the rules under which telcos — such as the situation Optus mentioned about Telstra — could gain discounted services from the NBN Co.

Topics: NBN, Broadband, Optus, Telcos

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