Get a licence, telcos tell utilities on NBN

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."