NBN Co to be given "enormous power" under NBN legislation amendments

Opposition communications minister, Malcolm Turnbull, argues NBN Co will erode private sector telcos' customer bases

Shadow communications minister, Malcolm Turnbull, has warned that NBN Co will be given “enormous power” under amendments to key National Broadband Network (NBN) legislation passed in the Senate late Friday.

According to Turnbull, the amendments to the National Broadband Network Companies Bill 2010 and Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2011 would allow the NBN Co to push private sector telecommunications providers, such as Telstra and Optus, out of the market.

“[The NBN Co] will be massively over-capitalised and as a consequence, it will need to find revenues wherever it can and the most obvious place to find them is by moving into the business of the private sector telcos, in particular the corporate and government businesses of the telcos,” he said.

According to Turnbull, the legislation allowed organisations, such as government departments and businesses with expenditure in the low tens of thousands of dollars, to acquire the telecommunications carrier’s licence and networking gear required to become a retail service provider and source wholesale services direct from NBN Co.

“What big company, what government department, what local council wouldn’t take advantage of that,” he said.

“The consequence being of course that Telstra and Optus and Macquarie Telecom and Vocus and Primus and all of the carriers that are marketing themselves to that government and corporate market will be out of business.”

Turnbull said the amendments — some 23 pages worth and including 35 amendments just for the Access Arrangements Bill — had sent the telecommunications sector into a “furore”.

As reported by Computerworld Australia, Optus chief executive, Paul O’Sullivan, labelled the new amendments a “curve ball”, saying that the country’s second largest telco required reassurances from government around certain aspects of the bill.

“We’re concerned that they could alter the intent of all the legislation to create a level playing field and provide equivalence of access to all the players in the industry,” he said last week.

“We are looking at these amendments carefully; we are in a constructive discussion with government and we would hope to be able to get the necessary changes to these amendments that would allow us to support the bill being passed in the Senate.”

Telstra has also argued that the legislation could result in the erosion of its corporate and government customer base.

“We believe retail service providers will want to provide services to the utilities and the types they will want in the future,” Telstra director government relations, James Shaw, said at a Senate hearing into the National Broadband Network Measures-Access Arrangements Bill 2010.

“It is an area in which there is already competition and there should be no need for these organsiations (utilities) to deal directly with the NBN.”

Follow Tim Lohman on Twitter: @tlohman

Follow Computerworld Australia on Twitter: @ComputerworldAU

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5 Comments

J plecher

1


Are we replacing one monopoly with another monopoly if that is the case can I have my money back I lost on the TELSTRA float"s

RonC911

2

J Plecher should check his mailbox occasionally. Telstra keeps sending quite reasonable dividend checks on a regular basis. I know I get mine.
Whilst Telstra shares have gone down in price, the dividends have continued to roll in. A better performance than a lot of other companies out there. I wont be selling my shares any time soon.
And dont be suprised if Telstra shares dont improve substantially once the NBN is rolled out.

Terry

3

If we as Australians think this new Telco,the NBN is going to be the savior of fast broadband think again.We could have fast broadband now but Telstra did'nt want to spend the money to upgrade.Now because the government is saying how wonderful it's going to be for everyone who wants very fast broadband,Telsta wants to be involved.Remember Telstra wants to be the boss,the telco who runs the show,so they will make sure we all pay a lot of money for a little faster speed.Over seas,say in Japan,fast broadband has been around for years at a very good price.We will pay through the nose and be told how cheap it is and how fast it is because we live in the best country in the world.

RS

4

@RonC911...

I agree with J. Plecher.

We have heard this all before, no amount of wishing can cover the fact that TLS investment has been a dismal failure. Unless of course, you generally, bought T1 @ $3.30 and sold when they were on their way to over $9 or bought at T3 tranche 1 @ $2 and sold prior to the second payment at up to $3.50 (and the dividend then 28c p.a ((14c x 2)) fully franked, on the $2 receipts... nice)!

But without knowing, my guess is Telstra would be one of the, if not the, worst performing (of the so called) blue chip shares on the ASX.

Admittedly the dividend is attractive, and it has to be, Telstra have been near all time lows of $2.55 recently and if the div was axed or reduced...look out.

So I just plucked another biggy NAB, out of thin air and did some quick/rough comparisons, so let's review those comparisons (CBA, RIO, BHP etc would probably be even better than NAB - but for the purpose of the exercise).

In 1997 when T1 was released @ $3.30 NAB were around $15. Telstra were paying a 7c fully franked (I believe) div and the NAB 10c (un-franked I believe) - both paid biannually. So TLS' was far and away the superior div (being the new kid on the block they had to be...)!

However... some 14 years on TLS's growth is -17% (having gone from $3.30 down to $2.74) and NAB's growth is just under +68% ($15 up to $25.15).

As for the dividend Telstra's div has gone from 7c to 14c (up 100%) while NAB's has gone from 10c to 78c (up 675%).

So with all due respect Ron (and again the div yield on a sub $3 stock is very attractive indeed - so much so, I just last week, put in a buy on TLS, but they didn't quite get low enough, never mind, LOL)...but TLS one of the a better performers? ...

Oh, better than HIH you mean, yes...!

plaistedzvu

5

Hi, now i'm happy that we're member in this article and that i wish i will delight in my stay here.

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