Could CBA and BHP become ISPs?

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.

TOPICS: NBN, Broadband, Telcos, Optus

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/

"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, Telcos, Optus


Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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  • I don't see the problem with it. People buy webhost services on a wholesale basis and consume these services themselves so they have a better range of options so why not with Internet Access. If you require a large amount of consumption and can afford it and you don't require a great deal of support then I say go for it. It is up to ISPs to offer a good deal and maybe some of this will keep ALL of them honest.

    ISPs like iiNet have had it good for a long time. They charge a lot for mediocre products. Both the ISPs I use (not iiNet) charge for static IP addresses. Static IPs don't cost ISPs $11.00 per month or anything like it. It's just profiteering on a grand scale.

    Dozens of ISPs have signed up customers in the last two or three years, requiring them to pay subscriptions by credit card and then they have the temerity to introduce credit card surcharges whilst the customer is still under contract. They lie, deceive and cheat people, particularly those who are not in a good position to do much about it and then they expect us to like the idea.

    Get stuffed iiNet and take Primus, Optus and Telstra with you.
    Lord Watchdog
  • I don't see what the issue is.

    OK, they can pay X amount to NBN Co for access to the NBN. Then what? That doesn't make them an ISP.
    If you've been listening to Twisted Wire, you would know that all that gets them is a piece of fibre from an end user premises to a point of interconnect. They still need to buy backhaul from an actual provider, or build their own. They still need IP peering/transit and a whole metric *ton of stuff.

    Internet: A single 1 km stand of fibre. It is not.
  • I just find it a tad hypocritical that iiNet a company who grew off the back of selling telstra wholesaled ADSL now find issue with something that is essentially the same.
  • I don't see what the big deal is. If it wasn't for Wholsalers such as Telstra, Pipe Networks, Reach, etc etc etc which allowed anyone with the right credentials to purchase service from them we would ALL be paying over inflated prices as we would have no other choice but to use Telstra's services.

    Even if there WAS policies in place to prevent a large company such as CBA or BHP purchasing wholesale servie from NBNCo, there are plenty of ways around it. Start a new company that is a subsidury of the large company or purcshae a smaller one that is doing that same job now, any policy that is put in place by the Gov at the behest of ISP's or the IIA will be easy to step around. Worst case the companies in question would play with 'funny money' they just pay themselfs for the services which they consume themselfs.
  • Just like there's nothing stopping iiNet from diversifying and getting into banking or Steve and Mike donning the hemets and actually doing some real hard slog for change, if companies like CBA or BHP wish to diversify (which, not being part of their core businesses, they probably wouldn't), but... why shouldn't they be allowed.

    Companies like iiNet all cry competition, to compete with Telstra (and rightly so). But when it comes to competitors to their own business, they obviously only want competitors much smaller than themselves and obviously aren't too keen on bigger players cutting in on their action!

    Whilst I agree regulations were and are needed via the PSTN, perhaps, just perhaps, some of these companies have had it too easy, for too long?
  • I too am a little troubled by this view that the ISPs don't want other big companies competing with them. I think the main point of people quoted in this article is that they don't want corporations to figure out they can run their own network at a fraction of a price they are currently being charged by these 'carriers'. They should be looking at ways in which they can offer value in their own services rather than trying to legislate away competition. I mean, so what if BHP decides it wants to enter the market and bid on some of those lucrative government contracts mentioned in the article? In the end it just means we, as tax payers, are going to get better value for money if they are just planning to undercut with exactly the same services then there is nothing at all wrong with that.

    It is a little hypercritical that these are the same companies crying foul about the barriers that Telstra put up to get in to the broadband market and now want the same thing for the NBN. By all means, we don't want another monopoly and there is a way to legislate for that, it isn't by making it harder to enter to the market though.