NBN Co supplying directly to utilities deemed acceptable by Senate Committee

NBN Co supplying directly to utilities deemed acceptable by Senate Committee

Despite objections from ISPs, the committee perceived the wholesale-only exemption for utility companies as a good thing

Utility companies wishing to procure National Broadband Network (NBN) services directly through NBN Co should be allowed to do so, according to a Senate Committee report.

Wholesale-only exemptions were introduced to the NBN Companies Bill 2010 so NBN Co could conveniently offer retail services to certain groups of end-users such as government agencies.

These arrangements were to be subjected to ACCC oversight.

Utility companies were in support of the provision since they do not want to work through a service reseller to connect to the NBN. Their network architecture and required services are more complex than a standard business connection.

But some ISPs have criticised the move which contradicts NBN Co’s directive of being an exclusively wholesale Internet services provider. A Senate hearing this month addressed the issue.

The Government saw the exemption for utilities as acceptable because it will support growth “growth of smart infrastructure management of electricity supply” and will motivate telcos to work harder to gain the business of utility companies.

The Environment and Communications Legislation Committee has thrown support behind the wholesale-only provisions in the bill as they will “drive innovation and competition” among ISPs.

“[We] support the utilities exemption, noting that utilities will still have the choice to purchase network management services from [ISPs] or other intermediaries,” the committee said in the report.

Smart Grid Australia, a non-profit organisation pushing for technology upgrades for the country’s electric power grid, had claimed working through a reseller would be an “impractical and unworkable proposition”.

According to telco lobby group, Competition Carriers Coalition (CCC), NBN Co direct dealings with utility operators would not eat into the marketshare of existing ISPs since utilities require a completely different type of service.

Telstra and Optus are against the provisions. They claimed utilities gave an opportunity for ISPs like themselves to offer value-added services.

The committee has recommended the NBN Companies Bill to be passed.

Follow the author of this article on Twitter: @spandaslui

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Tags broadbandTelstranbn coTelecommunicationsoptusNational Broadband Network (NBN)Competition Carriers Coalition (CCC)NBN Companies Bill 2010mobile solutions

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