NBN Update 6 - NBN Legislation Passed

30 March 2011 Author: Nick Abrahams

Contacts

Introduction

In our NBN Update 3, we set out the then proposed framework for the NBN legislation. This legislation passed the Senate on 25th March and the lower house on 28th March, both after marathon extended sessions. We will focus in this update on the amendments that have been made to the bills since they were originally introduced.

National Broadband Network Companies Bill 2011

This bill establishes the regulatory framework covering NBN Co’s ownership and operations. Only limited amendments have been made to this bill. The most notable are as follows:

  • The period in which NBN Co has to complete the network has been extended by 2.5 years to 31 December 2020. The Government’s reasoning for this extension is that the NBN fibre build will now cover 93 per cent of homes instead of the 90 per cent that was originally envisaged.
  • Exemptions from State Government stamp duty have been included in relation to the transfer of any assets from Telstra to NBN Co.
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Telecommunications Legislation Amendment (National Broadband Network Measures – Access Arrangements) Bill 2011

This bill amends the Competition and Consumer Act 2010 (the CCA) and the Telecommunications Act 1997 so as to introduce new access and equivalence obligations relating to the supply of wholesale services by NBN Co. A number of issues with the original draft bill have been hotly debated over the last year by existing carriers and commentators. The Government introduced 23 pages of amendments to the bill at the last moment last week in order to deal with some of these concerns and also the Government’s aim to ensure price equivalence across the network. The most important results of the amendments to the bill are as follows:

  • NBN Co has been exempted from a number of aspects to the CCA in order to promote the national interest of structural reform in the telecommunications industry and to promote uniform pricing. Some examples of NBN Co conduct which this covers include:
    • NBN Co is not required to offer access to its facilities unless they are designated points of interconnection
    • NBN Co may require access seekers to obtain more than one service (i.e. and not sell services individually)
    • other conduct necessary to achieve uniform national pricing.

    The Government however failed in its aim to have any listed point of interconnection developed by the Australian Competition and Consumer Commission approved by NBN Co. An amendment requested by the Greens and Independents was passed so that approval is only required by NBN Co while the network is still being built (i.e. the latest date being 31 December 2020).
  • The anti-cherry picking provisions were the subject of a number of submissions from existing carriers. These clauses prevent a person from installing a new “superfast carriage network” or upgrading an existing network without also offering a layer 2 bit stream service on a wholesale basis (as will NBN Co). The provisions have been amended so that they only apply to networks which are used or proposed to be used wholly or principally to residential or small business customers. The previous words applied to any “customers” which could have caught a number of corporate networks (or communications networks aimed at high-end corporate customers).
  • The amendments confirm that NBN Co is entitled to sell to carriers, service providers and utilities. This was also the subject of extensive submissions from carriers and it amounts to scope creep in that NBN Co is no longer a wholesale only provider. NBN Co is entitled to sell to these parties for their own internal business purposes as well as for (in the case of carriers and service providers)
    on-selling to other customers.
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Next Steps

The next step for NBN Co is to finalise arrangements with Telstra. Until it is able to so, much of the network build is on hold.

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