Australia - Legislative delays may also delay deal with Telstra and NBN roll-out

[the australian] THE government's failure to pass crucial legislation designed to underpin the success of the National Broadband Network may prove costly.

It could disrupt the rollout of the $43 billion project and threaten its deal with Telstra.

According to confidential government documents obtained by The Australian under Freedom of Information laws, the historic $11bn non-binding deal between Telstra and Labor's NBN Co could be delayed unless the government passes legislation aimed to right the rickety telecommunication regulatory regime in preparation for the NBN within the remaining two weeks of the spring parliamentary sittings.

"The reintroduction and passage of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 (the Bill), incorporating the previously agreed government amendments, will drive the timing of Telstra and NBN Co being able to finalise the definitive agreements," the documents say.

The documents advise that the bill should have been re-introduced into the House of Representatives in the first sitting week of the new parliament "to maximise the chances so that Telstra's shareholders can approve the deal by the end of June 2011".

However, the government failed to prioritise the core pieces of legislation following its controversial return to power in September.

There are now concerns that potential delays to the Telstra deal could spread to the NBN and impede its mission to roll out the fibre network across the nation. The NBN Co needs to access Telstra's network of pits, pipes and ducts to lay its fibre to homes, but until a definitive deal is reached this is unlikely to come to pass.

"Passage (is) required in Spring 2010 sittings to enable NBN implementation to proceed," said the documents.

The passage of other NBN-related bills -- including the NBN Companies Bill and the Fibre Deployment Bill -- are also urged to be completed in spring to provide certainty and ample time for industry players and stakeholders to adapt.

The Consumer Safeguards Bill has entered the House of Representative, but the other two are yet to be reintroduced.

The failure to reintroduce all pieces of the legislation go against the recommendations contained in the FOI documents. The documents recommended that all three bills be marked as critical priorities in the government's legislative agenda. It says the urgency surrounding these bills requires that they be reintroduced and passed in the same spring sitting.

With only two weeks remaining, the prospect of these bills passing into law seems unlikely.

For the past 12 months the legislation has stalled under a successful filibuster by the opposition and a lack of support from independent senators who did not approve of the harsh regulations used to force Telstra into a deal.

But even though most of those harsher caveats - including threats to deny Telstra access to new wireless spectrum and threats to force Telstra to divest its stake in Foxtel - were nullified when the NBN Co and Telstra agreed on the $11bn non-binding deal for the telco to migrate its customers to the NBN, the government has been unable to recruit the needed support of independent senators Steve Fielding and Nick Xenophon to pass the bill.

Outstanding telco bill threat to deal