The legislation which establishes NBN Co and the regulatory environment in which it is to operate passed both houses of parliament in March (after extensive debate) and has since received Royal Assent.
There are two main parts to the legislation, the first of which is the National Broadband Network Companies Act. This Act:
- limits NBN Co to operating as a wholesale only telecommunications company, but there are extensive exemptions to this general rule which allow NBN Co to sell direct to carriers for any purpose (i.e. not just for resale), to utilities and to state and territory government road authorities; and
- establishes the framework for the eventual sale of NBN Co and the making of regulations to set limits on private control of NBN Co post privatisation.
Existing carriers objected to the broad range of NBN Co’s potential direct customers, but the Acts were passed despite these objections. NBN Co is therefore permitted to offer somewhat more than “wholesale only” services.
The second Act substantially related to the NBN is the Telecommunications Legislation Amendment (National Broadband Network – Access Measures) Act. This Act:
- subjects NBN Co to Freedom of Information laws;
- is intended to make NBN Co’s activities transparent;
- makes all of NBN Co’s services “declared” for the purposes of the telecommunications access regime, with the result that any access seeker can obtain services for the same price and on the same terms as any other access seeker;
- makes NBN Co subject to ACCC oversight in relation to its services;
- includes amendments to limit third parties “cherry picking” high profit areas and offering services in competition to NBN Co.
The anti-cherry picking provisions have been subject to significant comment. It has been argued that the effect of these provisions is to lessen (rather than improve) competition. However, it is difficult to see how the NBN could be successful on a nation-wide basis if it is subject to significant competition in high profit areas.