Optus, ACCC attack National Broadband Network legislation at Senate hearing

The Government’s National Broadband Network has come under attack from all sides, with telco giant Optus and the corporate regulator once again raising concerns that the network could abandon its wholesale-only roots to operate as a retail entity.

These organisations have joined a growing chorus of telcos, including Telstra and Primus, that have highlighted the potential for the NBN to act as a competitor in the retail environment, undermining the Government’s promises the network would be a wholesale-only operator.

At a Senate Select Committee yesterday, several groups including telco iiNet, council groups and the Communications Expert Group all spoke regarding the viability of the NBN and the process of its construction.

Optus director of government and corporate affairs, Maha Krishnapillai, said the company was concerned regarding the NBN draft legislation which gives the communications minister scope to declare the network a retail operator under certain circumstances.

“These have given us real cause for concern as they signal significant winding back, in our view, in the government’s worthy vision of a structurally separated wholesale-only network, operating on genuine open-access terms,” he said.

While Optus has been a big supporter of the network, its submission to the Government has emphasised some of its concerns including a lack of equal wholesale access. It is concerned that Telstra, which is currently in negotiations with the Government regarding the sale of its networks, would be given cheaper access to the NBN.

“It’s critical that no retail communications provider can gain an effective controlling stake in the NBN Co, as this would significantly compromise the reform credentials of the NBN. We don’t want to replace one monopolist, in Telstra, with an even more powerful, better resourced and better backed monopolist.”

Krishnapillai said the company still supports the network and believes it is commercially viable, but warns there must be changes made to the draft legislation before a satisfying project can be put underway. He also said he did not need the NBN implementation study to determine whether the project was viable.

This study, conducted by KPMG, has been a controversial point in the Senate. Senators have requested the study before voting on the NBN legislation, saying they need more information, but the Government has refused to specify a solid release date.

Instead, the Government has been hoping to avoid a legislative battle by negotiating with Telstra regarding the sale of its networks. Despite rumours emerging this week of a $9 billion sale, both parties have said no solid deal has been made.

Krishnapillai said yesterday the network could be built for less than the quoted $43 billion if Telstra does not “hold the whole country to ransom” on pricing deals. He also said the company wants to see NBN buyers limited to 20% of the whole network.

Meanwhile, Australian Competition and Consumer Commission executive general manager of regulatory affairs, Mark Pearson, yesterday warned the committee against being too prescriptive in the legislation.

“Well, I will simply say that the commission’s clear and consistent position has been the wholesale-only nature of the NBN is important to the regulatory task that we have,” he said.

Additionally, industry manager at the Communications and Information Technology Training Group, Kevin Fothergill, told the committee that 30,000 people must be trained in electrical skills in order for the network to be built within the Government’s timetable of eight years.

”There are not enough electricians to do this work. That is a fact of life,” he said, adding that NBN workers must install the network in 90% in households at a rate of 4,000 per day.

The inquiry is set to continue today, with the Australian Telecommunications Users Group, the Australian Communications Consumer Action Network and the Department of Communications itself all set to speak before the committee.