A Senate committee has endorsed a controversial bill that will change some of the rules governing NBN’s operations, but Labor and Greens senators have called for a major overhaul of the proposed legislation.
A report from the Senate Standing Committees on Environment and Communications has called for the Telecommunications Legislation Amendment (Access Regime and NBN Companies) Bill 2015 to be passed.
Although some of the provisions in bill have proved uncontroversial, a number of elements have raised alarm among telcos.
Among the measures that have proved controversial is an exception to NBN’s non-discrimination obligation that requires the company to offer identical treatment to retail service providers (RSPs). The bill would relax this obligation when it comes to pilots and trials of new technologies.
Currently if an RSP wants to test a new technology or service on the National Broadband Network, NBN is required to offer the same opportunity to other RSPs. The government has said that this can be an impediment to innovation.
Telcos, including Optus, Macquarie Telecom and members of the Competitive Carriers’ Coalition, have argued that relaxing the non-discrimination rule for pilots could offer a potential first-mover advantage to some RSPs.
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,” Optus argued.
The Department of Communications and the Arts has said that the bill’s wording is such that any first-mover advantage would be limited and that the process would be transparent.
A dissenting report by Labor and Greens senators said that “the risks posed by relaxing the non-discrimination provisions far outweigh any imagined benefits”.
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Similarly, the dissenting report questioned moves to relax the line of business restrictions placed on NBN.
The bill would allow NBN to dispose of surplus assets but would also allow the company's line of business restrictions to be varied through regulation, rather than legislation.
The National Broadband Network Companies Act 2011 currently restricts NBN to supplying communications services to carriers and service providers (with a handful of exceptions).
Under the rules, NBN is prohibited from supplying content services, non-communications services, and goods that aren’t linked to delivering network access to RSPs.
NBN’s investments in other companies are subject to similar restrictions.
The government has said the intention isn’t to allow NBN to shift away from being a wholesale network access provider but to deal with potential future developments that may require some changes to these restrictions.
That proposed change has dismayed telcos, with Telstra warning of the potential for mission creep.
“If the Government wants to exempt certain conduct relating to NBN Co's line of business restrictions, it should be open and transparent about it,” the dissenting report states.
“For example, Labor and the Australian Greens do not object to the proposed amendment that would enable NBN Co to dispose of surplus non-communications goods. The broad-based regulation making power is a different beast entirely, and it is entirely unsurprising to Labor and the Australian Greens that the telecommunications industry is united in opposition to this measure.”
The committee's majority report cited evidence given by Department of Communications and the Arts assistant secretary Philip Mason.
In a letter to the committee, Mason acknowledged that “an argument can be made that the proposed regulation-making power could provide scope for an NBN corporation to operate in some retail markets in some instances," for example the provision of data centre services.
“That said, for an NBN corporation to be able to provide a retail data centre service, two decisions would need to be made by Government and reflected in any enabling regulation,” Mason wrote.
“First, that an NBN corporation could provide data centre services (other than where they are ancillary or
incidental to the supply of eligible services, which is already permitted). Second, that it could
provide them on a retail basis... any regulations could be worded to make it clear they do
not enable the retail supply of a service.
“As previously advised to the Committee, in all instances, any regulations making changes to NBN Co's line of business restrictions would be subject to scrutiny and disallowance by the Parliament.