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

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

Copyright © 2011 IDG Communications, Inc.

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