Australia - Broadband network to go fully private

[smh] THE government will sell its stake in the national broadband network within five years of it being completed, under draft legislation released by the government.

The draft bill sets in law some of the key government pledges surrounding the $43 billion broadband network, but leaves some questions unanswered about the operations of NBN Co, the company set up to build the network.

The Senate will today prepare to debate legislation to split Telstra, with talk the government is considering amendments to give the Australian Competition and Consumer Commission greater say in structural separation, in an effort to woo crossbench senators.

The draft broadband bill makes it mandatory that, in the establishment phase, the government maintains a majority stake in NBN Co. But once the network is formally declared complete, it requires the government to sell its stake within five years. If the timeline to build the network is met, NBN Co will be privatised by 2023.

The legislation also declares the network as wholesale only, meaning it will sell access to retail telecommunications companies.

This has prompted concerns from some because it gives the Communications Minister discretion to relax the wholesale-only rule. Explanatory notes with the legislation say this is needed to allow flexibility to offer services to end-users such as government agencies.

The head of the Competitive Carriers Coalition, David Forman, said the government needed to define what was meant by wholesale services.

Investors did not appear too concerned with the bill and are instead focused on the legislation to split Telstra. ''It was as expected,'' one analyst said of the broadband legislation. Telstra's shares yesterday fell 4¢ to $2.96, equalling their record low in March last year.

The draft legislation does not clarify how much of NBN Co can be owned by any single entity during the period of majority government ownership or afterwards.

It says only that an ''unacceptable private ownership or control situation'' is prohibited, with the term to be defined in regulations that are yet to be released.

The bill will be introduced before July.

Broadband network to go fully private