Energy industry attacks Coalition position on NBN wholesale changes
- 04 March, 2011 12:30
- Comments 5
The energy utilities industry has attacked the Coalition’s proposed NBN legislation amendments that would stop NBN Co from selling network access directly to selected companies and agencies.
The Energy Networks Association, which represents most of Australia’s electricity and gas utility companies, made the comments in a submission to the Senate committee investigating the National Broadband Network Companies Bill 2010.
“The Federal Opposition’s proposed amendments 5 and 6 to the Bill may have the effect of... encouraging socially inefficient duplication of communications infrastructure and increasing the cost of delivering energy network services in instances where the NBN would have otherwise been the most cost-effective and viable option,” ENA said in the submission.
ENA director, Tanya Bardin, used her appearance before the committee to say Shadow Communications Minister, Malcolm Turnbull, was wrong to assume utilities were interested in on-selling NBN Co Internet services.
“Because we are seeking such a basic service, NBN Co isn’t taking away market opportunities for retailers,” she said. “Retailers would be looking to take the basic service, enhance that and sell it as a more complete service to the market.
“Once a retailer takes an NBN Co service and integrates this with their own network or adds their own electronic equipment, this introduces complexities and unknowns that add risk to the reliable operation of energy networks.”
Competitive Carrier’s Coalition chairman, David Forman, also reiterated this point when question by Liberal Senator, Mary Jo Fisher.
“We want to keep NBN Co narrowly focussed around wholesale services,” he said. [But] this exception we see as very, very narrow and we don’t have a concern.
“If what the utilities are providing is based on an underlying network carriage service then [RSPs] would have to acquire it from the NBN anyway before reselling it… I’ve not seen any evidence that anybody has identified that as a market.”
According to the Coalition, the amendments are designed to prevent NBN Co from taking viable business from retail service providers. Optus CEO, Paul O’Sullivan, recently said steps must be taken to prevent NBN Co from becoming a “lumbering monopoly” or “another Telstra”.
Telstra itself echoed these concerns in its submission, which claimed the legislation could allow Government to unfairly compete against RSPs in key sectors.
“The exemptions to the wholesale only requirement are an example of the potential for ‘scope creep’,” Telstra said. “[They] will allow NBN Co to compete at the retail level for the supply of these services, but there does not appear to be any meaningful justification for this.
“Worse still, the scope of the services that fall within the exemption are very broad.”
Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.
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Comments
Mike ELLIOTT
The only way to have any true competition is to keep Telstra in competition with the NBN. The government is blackmailing Telstra and killing off any competition. It will then have to charge high fees to cover its costs. A public / government company usally costs alot more to run than a private company.
Tom Brown
Looks like Mr Turnbull stuck in his thumb and pulled out a, prune.
If a utility retailer wants to set up a internet division, why not?
But the NBN needs to ensure that retailers do not package their services so as to use profit from another sector ( for example electricity or water) to sweeten package deals and achieve an unfair advantage. It is this unfair advantage monopolisation that is the chief complaint about Telstra wholesale and that the utility companies could bring to the NBN.
There is a benefit if utility wholesalers want to setup services like management of the utilities, the reading of meters for example, the meter readers will be done out of a job (not that I think that is of any concern to Mr Turnbull or Mr Abbott) but that is what technology does it moves jobs from one field to another. I wonder if the utility companies will give a discount to customers who elect to automated readings.
Keep NBN as a wholesaler and commit them to a level playing field and separate the NBN from lobby interests then you will have a robust communications backbone for the whole country.
Re Mike's comment, Telstra do not wish to compete! In fact it was never Telstra's reason for existance, the purpose was to supply a service where others were unwilling.
Kevin
If say an electricity provider wants to bundle an internet service to lure in customers then the likes of Internode should also be allowed to bundle power supplies to their product range.
Let's go one step further.
Internode. We will provide all your Internet, Phone, energy, water, insurance, helath and banking needs all in one parcel.
Now that would be real competition.
Redrover
Dodo is an example of an ISP that is reselling power and gas. I believe they're currently only doing it in Victoria though.
Kev
Mike ELLIOTT, did you actually read this article?
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