The pros and cons of letting NBN Co sell to government

Stuart Corner
Monday, 19 April 2010 16:00

IT Policy - Regulation

The voices complaining about provisions in the NBN legislation that would enable NBN Co to provide services to government agencies have been many and loud, but according to one expert this is a perfectly reasonable proposition; and one that could create an upheaval among established telecoms providers.

Walter Green of the Communications Experts Group, told last week's public hearing by the Senate Committee enquiring into the National Broadband Network that it was perfectly reasonable for government agencies to be able to buy services direct from NBN Co as it would enable them to craft networks better suited to their needs than taking services from a retail provider.

Earlier, the committee had heard Maha Krishnapillai, director, corporate and government affairs at Optus, express the widely held concerns about the retail provision in the draft legislation when he said: "'¦the significant scope and discretion they give to NBN Co to set up as a retail competitor'¦is a real threat to Optus and, we believe, the sector and other carriers who have considerable government contracts."

He added: "In addition there is nothing in the draft bills to stop NBN Co taking a controlling stake in a retail communications company and indeed then entering retail markets. The fact that the bill contemplates a retail role for NBN Co. is a significant and deeply worrying step back from the government's clear commitment to operate the NBN Co. as a wholesale only provider."

His concerns were echoed by iiNet's chief regulatory officer, Steve Dalby, who was more concerned about the scope of this provision extending into the corporate sector. "We really need more information generally'¦about what 'wholesale' means. Whether the term used is 'retailing' or 'wholesaling', it is the supply of services to a large customer'¦I do not see what would prevent any large organisation'¦going direct to NBN Co. and saying, 'I want a big fat fibre between A and B, and I have just bought myself a carrier licence, and I will buy it from you on wholesale terms.'"

Green agreed that NBN Co should not be allowed to be a retailer, put that "federal, state and government agencies should be allowed to create their own equivalent of a carriage service provider and buy their services direct from the NBN as per any other carrier."

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