Analysts and industry representatives have given the Government’s NBN draft legislation mixed reviews, but political parties are signalling plans to oppose it.
The Government’s explanatory note on proposed legislative changes allows it to offer services directly to certain users, such as government agencies, which would place it in competition with telcos. According to Ovum research director, David Kennedy, the legislation was largely expected by the industry and offered few surprises.
“They’re not dissimilar to the arrangements we’ve seen applied in other parts of the industry,” he said. “I think the difference is there’s a higher level of ministerial discretion.
“It simply reflects the Government wanting to keep its options open at this early stage.”
Optus director of government and corporate affairs, Maha Krishnapillai, supported the legislation and said the changes would give the Government more powers to target Telstra. In a statement to ARN, Krishnapillai was against any Government legislation that allowed NBNco to sell retail Internet as a competitor.
“It is vitally important that we get these rules right and that the legislation supports the principles Optus has advocated for many years, which is a structurally separated, wholesale only, open access network with strong ACCC oversight,” he said.
His comments were in line with those of Opposition communications minister, Tony Smith, who accused the Government of not clarifying its position on whether or not NBNco would become a retail provider.
“It’s starting to look like ‘wholesale only’ is a misleading and deceptive term," he said in a statement. “It’s now looking like it could either be described as ‘wholesale mostly’ or ‘wholesale partly’. Far from providing clarity, the Minister [Senator Stephen Conroy] has once again delivered uncertainty.”
The Australian Greens communications spokesperson, Senator Scott Ludlam, welcomed the invitation for public comment.
“It really beggars belief that the Government would consider that [retail situation],” he said. “In the midst of trying to clean up the mess that was made by the privatisation of Telstra, contemplating the taxpayer funding another wholesale monopoly and then flogging it again without any regard to the public interest aspect is incomprehensible."
Although the Government’s proposed legislation allows the Finance Minister to postpone the sale indefinitely according to market conditions, Ludlam said it wasn’t enough to prevent an inappropriate sale of NBNco.
“That’s not a safeguard,” he said. “I think the ideology that we have to privatise essential public services because the private sector is more efficient, is dead and buried.
“There is strong public interest and commercial arguments for maintaining wholesale, open access in public hands where it can generate revenues back towards the Commonwealth and where it’s open to the kind of accountability mechanisms that Parliament can provide.”
But Competitive Carriers’ Coalition executive director, David Forman, thought the Government’s wording was merely precautionary, rather than a signal of it entering retail markets.
“It might just be targeted towards finding a way to deal with very specific concerns of very specific agencies,” he said. “We’re confident we’ll be able to have a discussion on whether that should stay in there or go out.”
Forman said a workaround for the Government may be to buy pre-existing networks and cited Optus as an example. If NBNco wanted to buy the ISP’s fibre optic cabling it could offer a deal for both the retail and infrastructure elements before selling off the retail business.