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Thursday, 24 March 2011
Page: 3322


Mr FLETCHER (3:58 PM) —The amendment in relation to the requirement that the supply of eligible services must be on a wholesale basis was moved in recognition of the fact that the legislation put forward by this government does not give adequate effect to its own commitment that NBN Co. would operate on wholesale-only basis. This is a very complex issue, but it is also an issue of the first importance in the policy bargain that is being put forward by this government. It is not, I might say, a policy bargain we agree with. But, in their own terms, the bargain that they have put is this: that competition will be restricted, indeed effectively barred, in facilities based competition by any network wishing to operate in competition with the NBN Co. In exchange for that unprecedented restriction on competition, the assurance that has been given by this government in policy terms is that NBN Co., this enormously powerful entity, will only operate as a wholesaler.

The implementation study notes the importance of this issue. I quote from page 28:

Defining wholesale-only is simple in theory but complex in practice.

Later on the same page, in discussing the possibility of a bank or another large corporate effectively being directly sold services by the NBN, the implementation study notes:

The risk is that relaxing the wholesale definition in this or other similar ways could provide an opportunity for NBN Co to expand its scope beyond what was originally intended by Government.

This is a very sage warning provided by the authors of the implementation study, who received $25 million from this government for the provision of that advice. The point they highlight is that the regulatory scheme this government has put forward, if it is to be delivered upon, depends upon the most rigorous restrictions on the capacity of NBN Co. to sell in only the wholesale market. If there is any doubt that NBN Co. also has the capacity to compete in the retail market then what this government is putting forward is a very bad bargain indeed. It is because of our fear that a very bad bargain is being put forward that we have moved these amendments.

Our fear as to the scope creep or the mission creep that NBN Co. is likely to engage in was enhanced when we saw the broad range of utilities which NBN Co. is to be permitted to sell to directly. These include transport authorities, electricity supply bodies, gas supply bodies, water supply bodies, sewer service bodies, stormwater drainage service bodies and state and territory road authorities. I cannot understand why the government did not include the Dust Diseases Tribunal and many other bodies, because it is very hard to draw any intellectually coherent basis for the range of categories of organisations which are to be permitted to be sold services directly and in clear violation of the stated policy principle which this government articulated when it first announced its policy on the National Broadband Network.

If this government is genuine about delivering on its policy commitments, we do not think it is sufficient to rely upon the mechanism contained in the bill as it was put to this House. The mechanism is a restriction on selling to anybody who is not a carrier or a carriage service provider. We say that mechanism may have been appropriate under the 1997 legislation but it is not appropriate now, when it is being pursued in the context of dramatic restrictions on competition barriers to any player wanting to come into the market to compete with the NBN Company. This is the vital new element, which is why it is not sufficient to rely upon the restriction that NBN Co. is only permitted to sell to a carrier or a carriage service provider. Additional safeguards are required if this government’s policy commitments are to be delivered on. That is why we have moved the amendments.


The DEPUTY SPEAKER (Hon. BC Scott)—The question is that amendments (1) and (2) as moved by the member for Wentworth be agreed to.

Question put.