Get a licence, telcos tell utilities on NBN

Get a licence, telcos tell utilities on NBN

Summary: Utility companies that want to access services directly from the National Broadband Network Company (NBN Co) should have to get a carrier licence, Telstra and Optus have argued.


Utility companies that want to access services directly from the National Broadband Network Company (NBN Co) should have to get a carrier licence, Telstra and Optus have argued.

At a Senate Committee hearing examining NBN legislation — National Broadband Network Companies Bill 2010 and Telecommunications Legislation Amendment (National Broadband Network Measures — Access Arrangements) Bill 2011 — on Friday, the Energy Networks Association had argued that utilities should be able to receive services directly from NBN Co rather than through retail service providers (RSPs) because RSPs would over-complicate the basic service utilities required.

Speaking at another Senate hearing in Sydney today, Telstra's director of government relations James Shaw said the utilities "hadn't made a sufficient case" to be allowed to receive direct services from NBN Co.

"We believe there will be a market there for retail service providers to provide the type of service that utilities want and can be done in a way that will add value to what utilities are after," he said. "If they believe we're not providing the types of service they want then they've got options of going elsewhere in the sector or they've got the option of getting a carrier licence and sourcing from NBN Co. So I don't think it's only one shot in the locker here."

However, Shaw argued that there should be an amendment to carrier licences to prevent large utilities from simply getting a licence just to supply to themselves. He said the utilities should also have to supply retail services to the public.

Optus' director of government and corporate affairs, Maha Krishnapillai, argued that the "value-add" of RSPs in the NBN world would be for basic switching, IT services and billing functions, all of which would be of use to utilities. However, he agreed that as long as carrier licence restrictions were tightened there was no issue with utilities getting carrier licences.

"If [they] choose to be a carrier, then as long as they abide by the obligations and requirements of getting a licence, then that is an open market. We shouldn't limit [utilities] from doing that," he said.

Volume discounts for the big telcos

Greens Senator Scott Ludlam suggested in the hearing that volume discounts for telcos such as Telstra and Optus, which have many customers, should be done away with in the interests of a level playing field for all telecommunications providers.

"We've debated that internally, and there are pros and cons around that. What we're trying to do is try to mirror normal commercial negotiations," Krishnapillai said.

He argued that should telcos be able to demonstrate to NBN Co that their volume reduces operating costs for NBN Co and aids in the efficiency of the service, then that should be reflected in the commercial negotiations.

Telstra agreed on this point.

"Where they aid efficiency, so long as it clearly abides by that criteria, it shouldn't necessarily be restricted to Telstra," Shaw said. "We think that it's not something for Telstra's benefit only. We think it's there for any company that can aid efficiency in providing NBN Co services to consumers."

Topics: NBN, Broadband, Telcos, Optus, Telstra


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • I think the telcos should be worried - why wouldnt large utilities buy themselves a carrier licence and setup their own infrastructure? Telcos have to be sure they are part of a value chain not just costs.
  • Given the rising trend of energy and water prices, and the fact that it's only going to get more expensive with carbon pricing, I would think that the government would be keen to remove the middleman for utilities' telecommunication needs to keep costs down.
  • @redrover, that might be true in the short term but in the longer term, would lead to NBN dominating the market as much as Telstra used to.
    • @mwil19 I think it depends on whether it is indeed commercial scope creep or if it is legitimately a niche special case scenario.

      My impression is that the kind of services utilities want to use on the NBN are those facilitating smartgrid operation ie. making the distribution of power/gas/water more efficient through intelligent realtime monitoring and regulation. This seems to me an endeavour which the government should be, and presumably is, encouraging.

      Common sense suggests that essential services should not be operated on a strictly for profit basis. Personally I have no issue with utilities interacting with other utilities and bypassing the middleman if it's in the national interest. From what I've read what the utilities want is very basic.

      On the other hand I would agree with you if the eHealth providers wanted the same deal.
      • The bigger issue, is once you step on the first stone, the path is already layed out. Putting in the initial legislation to allow scope creep (even if it appears legitimate) would make it very easy to amend by further governments to extend it even further

        Telstra and Optus are correct, energy utilities should just get a carrier license.
        • "Telstra and Optus are correct, energy utilities should just get a carrier license."

          Interesting idea deteego.
          Then as carriers, these utility companies should be within their rights to compete with the Big ISPS by providing internet services to homes over power lines as trialled in Tas.
          • Getting a carrier license doesn't make you an ISP (in the sense of providing internet to customers), what a carrier license does do is allow you to access the NBN on the same terms that every other company (including ISP's).

            As for providing internet over power lines, I doubt they will do that when the NBN can do a better job (and NBNCo's CVC and AVC charges will carry through the utility company as well)
  • "Get a Licence or buy from us"

    I can just see it now: "Hello electricity supplier, my Smart Meter is on the blink & I have no power"
    "Sorry who are you with, Telstra or Optus? You'll have to contact their overseas call centre's support service"
    "Have a Nice Day".
    • Uh, if the electricity companies get a carrier licence, they act as their own ISP, they are just on the same ground as any other (ISP) with a carrier licence
  • General comment (like the one I made at CW) not replying to anyone here, in relation to volume discounts...

    Optus, are becoming, if they aren't already, the laughing stock of Australia's comms (and that's coming from someone who has had many arguments with TLS shareholders about their beloved Telstra)!

    In April last year Optus whinged because Telstra could, theoretically receive, the exact preferential treatment they are now asking of NBN Co, for them self!