Debt-laden NBN Co will go retail: Turnbull

The National Broadband Network Company (NBN Co) will be forced to begin offering some retail services in order to pay off the debt racked up in building the network, Shadow Communications Minister Malcolm Turnbull has predicted.

MPs began debating the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendment (National Broadband Network Measures-Access Arrangements) Bill 2010 in the lower house of parliament yesterday afternoon. These two pieces of legislation establish the framework for competition on the NBN and future ownership arrangements for the network.

Turnbull said the Coalition is preparing to introduce a number of amendments and said that the provision in the legislation allowing NBN Co to offer some retail services would be one of those the Coalition seeks to amend.

"The temptation, Mr Speaker, and this will apply to any government, is that once this broadband network is built, or even part built, the temptation is going to be for it to creep further and further into the more valuable areas of telecommunications services," Turnbull said. "Further and further onto the retail turf of private telecommunications companies and it will be under pressure to do that because of the massive amount of debt it is carrying."

The provision would allow the government to offer services to end users in specific cases such as directly to government departments. Turnbull said this would represent a creep on retail territory.

"There is no restriction on the nature of telecommunications services the NBN can deliver to those entities and a number of those entities have said to us ... 'we'd rather deal with the NBN. We don't want to deal with Telstra, or Optus, iiNet or Macquarie Telecom," he said.

"They want to cut out the retailer. Well, so would all major customers for telecommunications services. The NBN can move further and further into the corporate, [it will] move into providing telecommunications services directly to large institutions, large corporations. In other words, to become a large retail telco ... and a wholesale telco for the rest of the market."