Monday, 21 March 2011
National Broadband Network Companies Bill 2010; Telecommunications Legislation Amendment (National Broadband Network Measures — Access Arrangements) Bill 2011
The government’s National Broadband Network policy will deliver access to high-speed broadband for all Australians and will also deliver structural reform of the telecommunications industry to promote for the first time sustainable retail level competition. Together, the National Broadband Network Companies Bill 2011 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2011 will ensure that NBN Co. delivers the government’s objectives. The NBN Companies Bill sets out key obligations on NBN Co. to limit it and focus it on wholesale-only telecommunications. It also covers the government ownership and provides for the eventual sale of the Commonwealth’s stake in the company, including clear parliamentary oversight.
The NBN access arrangements bill establishes clear supply equivalence and transparency obligations for NBN Co. that will ensure it can provide a robust platform for vigorous retail competition. The bill also sets out obligations for providers of superfast fixed line networks to ensure they operate under comparable regulatory arrangements to those applying to NBN Co.
The government believes that the bills strike an appropriate balance between controlling NBN Co.’s operations and providing sufficient flexibility to respond to market circumstances. The government supported the Australian Greens amendment to the NBN access bill to add NBN Co. as a prescribed authority under the FOI Act with an exemption for documents in relation to its commercial activities. This is in addition to the usual oversight activities applying to such a government business enterprise and the two parliamentary committees the government has established to monitor the NBN.
The government welcomes appropriate scrutiny of NBN Co.’s operations. The government welcomes the report of the Senate Environment and Communications Legislation Committee and its recommendations that the bills should be passed. However, the government does not support the amendments to the bills proposed by coalition senators in their minority report. These amendments have already been rejected in the House.
The government also believes that it is important that utilities should, if they wish to, be able to purchase basic connectivity services from NBN Co. for their sole internal use. Banning this, as the opposition proposes, could inhibit the deployment of smart infrastructure. The government also opposes the opposition’s proposed amendment that NBN Co. should be restricted through statute to operating at layer 2 in the telecommunications technology stack. It is clear from the government’s statement of expectations to NBN Co., and from NBN Co.’s corporate plan, that NBN Co. must operate at layer 2. However, some of the technical functionality that NBN Co.’s customers want operates at layer 3. A simple black-and-white layer 2 rule and statute would therefore be inflexible and counterproductive. If such certainty is required in the future, the NBN Companies Bill provides that the minister can make a licence condition on what services NBN Co. must and must not supply.
The government also rejects the opposition’s amendments to provisions in the NBN access arrangements bill designed to deliver a level playing field in the rollout of superfast fixed-line networks. Removal of the level-playing-field provisions will undermine the government’s policy that NBN Co. deliver uniform national wholesale prices, as well as NBN Co.’s business case which provides for a cross-subsidy from high-value areas to less profitable areas, like most of regional Australia. This will lead to less equitable outcomes for regional Australians and less robust retail competition.
Without these provisions, many communities would get a non-NBN solution and could be serviced by a single, vertically integrated provider that does not provide access to other providers. This means that end users serviced by the provider would not have access to the same kinds of service outcomes that would be available to end users on the NBN. Responding to a comment made by the Senate Environment and Communications Legislation Committee that the level-playing-field arrangements could be further clarified, we have been engaging with industry on this matter, and the government will shortly be introducing amendments in the parliament to address this.
The government also rejects the opposition’s proposed amendments to the provisions dealing with the possible future privatisation of NBN Co. The opposition’s proposals would simply enable a future coalition government to sell NBN Co. as quickly as possible, regardless of the needs of regional and rural Australians and the public benefit from restructuring the telecommunications market. The effect of this removal would also remove the right of a future parliament to disallow any sale. The government considers that a sale decision is best made in the future by the government and parliament of the day.
The opposition’s view that any discrimination that aids efficiency should be struck out of the NBN legislation shows an inherent misunderstanding of how these provisions will work. Discrimination based on efficiency has long been recognised to promote competition and innovation in the market. The NBN access arrangements bill already contains safeguards to address the concerns. Under the bill, NBN Co. cannot offer a volume discount unless it is in accordance with a framework that has been approved by the ACCC as part of NBN Co.’s special access undertaking. Further, any differentiated deals must be published so there will be full transparency and the ACCC and access seekers can take action if they consider that the rules have been breached.
The government will be proposing some amendments that will further strengthen the ability of the NBN to deliver on its nation-building objectives, that will improve the operation of the bills and that will deliver further certainty for industry and the community. For example, a series of amendments clarifies the operation of the level-playing-field provisions, ensuring they are focused more tightly on local access networks, targeting residential and small business customers, and that minor extensions to existing superfast networks, and connections of new customers to existing networks will not be subject to the provisions. As indicated last December, the government will also propose amendments to the level-playing-field provisions to add a wholesale-only requirement. I look forward to debating these amendments in committee.
The passage of these bills, as recommended by the Senate legislation committee, will provide certainty for NBN Co. and industry and facilitate the rollout of the NBN so we can get on with delivering the benefits of superfast broadband for all Australians.
Debate (on motion by Senator Arbib) adjourned.
Ordered that the resumption of the debate be made an order of the day for a later hour.