Optus calls for changes to NBN bill

Telco concerned over bill to implement a number of the Vertigan panel’s recommendations

Optus has called for changes to be made to a government bill intended to implement a number of recommendations of the Vertigan review into the National Broadband Network.

The Telecommunications Legislation Amendment (Access Regime and NBN Companies) Bill 2015 is the first of what is expected to be two bills that implement recommendations made by the Vertigan panel.

The Vertigan panel’s findings were released in 2014; the panel’s three reports formed part of a swathe of reviews into the rollout of the National Broadband Network and the operations of NBN in the wake of the Coalition’s 2013 electoral victory.

The government in December 2014 issued a response to the 53 recommendations of the Vertigan review.

The Telecommunications Legislation Amendment (Access Regime and NBN Companies) Bill 2015 is currently the subject of a parliamentary inquiry, which is due to report next month.

“The bill contains measures that respond to recommendations made by the Vertigan panel to improve the operation of the telecommunications access regime and NBN Co's line of business obligations,” Paul Fletcher said during his speech introducing the bill in December last year.

“These measures support the government's objective of establishing a more competitive regulatory framework that will, in turn, provide greater certainty for industry and more innovative, effective and efficient service delivery for consumers,” said the minister for territories, local government and major projects.

“The bill also includes amendments to provide continued certainty for NBN Co during the National Broadband Network’s rollout throughout Australia,” Fletcher said.

Optus said it doesn’t object to many elements of the bill.

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However, in a submission (PDF) to the inquiry, Optus raises a number of objections to some elements of the proposed legislation.

Measures in the bill intended to ensure consistency in the treatment of NBN and other access providers by the Australian Competition and Consumer Commission go beyond a Vertigan panel recommendation by requiring the ACCC “to ensure that NBN Co is not disadvantaged compared to other access providers”, Optus argued.

The changes could lengthen the decision making processes of the ACCC and may encourage legal challenges to decisions by the competition watchdog.

The telco’s submission argued that an ACCC ruling that cut the prices of a number of Telstra’s wholesale services despite the government’s objections is an example of the kind decision that could be affected by the bill.

Amendments that would affect the process of making changes to the Special Access Undertaking NBN has lodged with the ACCC and limit the ACCC’s ability to require specific variations to an SAU are also dangerous, the telco argued.

NBN’s SAU governs the company’s operations as the sole wholesaler for the National Broadband Network.

Giving an access provider flexibility in its interpretation of a notice from the ACCC to vary an SAU “is likely to open the scope for the process to be abused,” Optus argued.

Optus said it also objected to two other elements of the bill that affect NBN’s operations.

One is measures to relax NBN’s non-discrimination obligations when it comes to piloting new products.

“Currently, if NBN Co or a CSP [carriage service provider] wishes to test a new service or technology on the NBN, NBN Co is required in accordance with its non-discrimination obligation to make the same service or technology available to all of its customers,” the bill’s explanatory memorandum states.

“This can act as a practical impediment to product development and also as a disincentive to innovation, because NBN Co must put in place detailed mechanisms to maintain non-discrimination in a trial or pilot environment or a CSP with a new idea would have difficulties developing and testing it with NBN Co without involving its competitors.”

“Enabling NBN Co to discriminate by limiting participation in pilots or trials could give a single RSP [retail service provider] a significant first mover advantage in the market,” Optus argued in response.

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“This could have adverse competition impacts, especially where significant systems, processes or commercial arrangements need to be put in place to bring a product or service to market.”

In addition, encouraging RSPs to approach NBN with new product ideas “is only likely to distract NBN Co from achieving its core objective of connecting broadband to households,” the telco said.

The other element of the bill Optus objects to would allow line of business restrictions imposed on NBN to be relaxed through the use of government regulation.

“NBN Co was established to specifically address a market failure relating to the provisions of last mile access for high speed broadband services; it should remain focused on that purpose,” Optus’ submission stated.

Read more: Telstra could benefit from proposed changes to NBN rules: Macquarie Telecom

“Optus does not believe that sufficient grounds have been advanced to support these proposed amendments.”

“We are also concerned that this change is being proposed at a time when NBN Co is already pushing the boundaries of its remit with reports that it is; seeking ACCC support to develop a POI backhaul service; considering new satellite services; and, is in discussions with airlines about developing inflight communications services,” the submission stated.

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