Background

On 1 March 2011 the two National Broadband Network ("NBN") bills that establish the regulatory framework of the NBN were given the green light by the House of Representatives and will now be examined by the Senate Environment and Communications Committee. The bills are the:

  • National Broadband Network Companies Bill 2010 ("Companies Bill"); and
  • Telecommunications Legislation Amendment (National Broadband Network Measures – Access Arrangements) Bill 2010 ("Access Bill").

Given that the original exposure drafts of the Bills were released in February 2010, the Senate Committee examining them has been urged to fast-track reporting on them. It is expected that the Senate will be debating these bills by the end of March.

Companies Bill

The Companies Bill contains provisions for the ownership and operating arrangements for NBN Co, including conditions for the timing of its sale by the Australian Government. It is largely procedural and uncontentious with the exception of a carve-out from the "wholesale only" NBN Co model that generated some commentary at the time the exposure draft was released.

NBN Co has often been said to be a "wholesale only" service. As CEO Mike Quigley has stated on many occasions "we will not compete with our customers" (a common criticism of the vertically integrated Telstra). The reservation that allowed the Minister to exempt certain services from the "wholesale-only" requirement is not in the Companies Bill as passed by the lower house.

The iteration of the Companies Bill passed by the lower house does include some exemptions from the "wholesale-only" requirement but only to allow NBN Co to provide services to some specified utilities such as transport authorities, electricity and gas supply bodies and State and Territory road authorities. As the explanatory memorandum on this states: "NBN Co is only permitted to supply a service that is used to carry communications necessary or desirable for specific uses by these entities." What this exemption may mean for competitors remains to be seen, but its impact on an open and competitive landscape should be minimal.

Access Bill

The Access Bill, if passed into law in its current form, will amend the Telecommunications Act 1997 and the Competition and Consumer Act 2010 (which replaced the Trade Practices Act 1974), so as to give effect to the Government's scheme for a national broadband network to be built and sold by NBN Co, operating as a wholesaler only.

The Access Bill passed by the lower house included an amendment initiated by the Greens (and supported by the Government) to make NBN Co subject to similar Freedom of Information Act 1982 ("FOI Act") obligations as other government owned corporations. However, the amendment has come under attack from the Federal Opposition which is concerned that NBN Co's "commercial activities" will still be exempt from the reach of the FOI Act. "Commercial activities" are activities carried out (or likely to be carried out) by NBN Co on a commercial basis. The Government has argued that NBN Co's commercial activities must be exempt to allow NBN Co to compete in the market.

If you would like to read more on this topic our previous commentary on the exposure drafts can be found here.

Our discussions in relation to other NBN legislation, such as the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 can also be found here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.