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.”