Australia - Govt is to introduce legislative amendments to address problems with potential "cherry picking" with NBN

[zdnet] The Federal Government has announced plans to introduce a number of amendments to National Broadband Network legislation to address industry concerns around cherry-picking provisions for fibre network providers.

In the Senate this morning during debate on the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendment (NBN Measures — Access Arrangements) Bill 2010, Labor Senator Mark Arbib, speaking on behalf of Communications Minister Stephen Conroy, indicated that the Federal Government would introduce amendments to cherry-picking provisions in the legislation after engaging with industry.

"[The government will introduce] a series of amendments [that] clarifies the operation of the level playing field provisions, ensuring they are focused more tightly on local access networks targeting residential and small business customers and that minor extensions to existing super-fast networks and connections of new customers to existing networks will not be subject to the provisions," Arbib told the Senate. "As indicated last December, the government will also propose amendments to the level playing field provisions to add a wholesale-only requirement."

NBN Co cross-subsidises the cost of providing access to regional and remote areas, with the lower costs of providing access to metropolitan areas. The anti-cherry-picking provisions in the access legislation are designed to prevent fibre providers building new networks in areas of the country with a high population and then providing access to consumers at less than that offered by NBN Co.

In a submission to a Senate inquiry into the two Bills, fibre network provider TransACT raised concerns that its existing network would be subject to the cherry-picking provisions in the legislation, which would adversely affect its business.

Telstra proposed in its submission that the provisions be removed entirely. Greens Communications Spokesperson Scott Ludlam said that this proposal showed why the provisions should stay.

"It's the strongest confirmation that we have yet that the provisions should stay as they are," he told the Senate this morning.

Ludlam had, just prior to the government announcement, expressed concern about the cherry-picking provisions, but said that the Greens could not give full approval to the Bills until the party had a chance to examine the detail of the government's proposed amendments.

Coalition Senators Simon Birmingham and Mary Jo Fisher both raised other matters, airing concerns that the NBN would never be privatised under the legislation and NBN Co might be engaged in mission creep if it is able to offer services directly to utilities as set out in one provision.

Arbib said the government rejected all of the Coalition's proposed amendments around these issues, stating that the proposals would "allow a future coalition government to sell off the NBN as soon as possible" and that removing the cherry-picking provisions as suggested would result in many communities only being able to get a "non-NBN" broadband service from a single vertically integrated provider.

Arbib also rejected the proposal to prevent NBN Co from offering services directly to utilities.

"Banning this, as the Coalition proposes, could inhibit the deployment of smart infrastructure," he said.

Govt to change NBN cherry-picking law