Satellite players arc up over NBN mission creep

Satellite players arc up over NBN mission creep

Updated: NewSat chief executive voices concerns over NBN Co movements

Satellite operators and service providers have followed in the footsteps of the wider ISP sector, issuing a warning about the potential for ‘mission creep’ under the National Broadband Network (NBN).

Key telcos have raised concerns over past months that the network wholesaler, NBN Co, could ultimately bypass retail service providers, becoming a retailer in its own right.

Though legislation passed in Parliament this week prevents the company from doing so, it is now able to directly offer access to the network to utilities, despite telcos arguing strongly against such measures.

Players in the satellite industry voiced similar concerns this week at a forum held as part of the Commsday Summit in Sydney.

In a question and answer session following a presentation by NBN Co satellite product manager, Oliver Stacey, NewSat chief Adrian Ballintine sought to clarify the situation specifically for the satellite industry.

“Can you categorically tell us today that you’re not going to encroach on non-disadvantaged people and you’re not going to move to the customer base of the corporates and you’re not going to use taxpayer money to subsidise the corporates?” he asked.

In particular, Ballintine voiced suspicions NBN Co was planning to, and had already contacted, some of NewSat’s clients, which include Fortune 100 companies in the mining, construction and oil verticals.

Stacey said NBN Co was simply following government policy.

“We have set up eligibility criteria which we have identified which will follow the ABG, and over time that may evolve,” he said.

He later clarified to Computerworld Australia that NBN Co would offer its satellite services in the same way as the fibre and fixed wireless arms of the $36 billion network.

“We’re a wholesale provider, anybody can get access to those services,” he said.

“We’re operating within a policy and a legislative framework and we’ll continue to operate there.

"We’re going to deliver a set of services that we believe are going to address the government’s policy mandates.”

However, industry players continued to reserve their concerns over the potential impact of NBN directly offering satellite services to larger companies.

Senior director of sales at competitor SES World Skies, Glen Tindall, argued that while the satellite tranche of NBN services appeared to targeted newer, smaller service providers than established operators, greater clarity was needed on the issue.

“I think if NBN co and the government could clarify the point on which and perhaps contain the scope creep, it would make it a lot easier for us to invest in this country and provide services here,” he said.

However, Optus head of satellite, Paul Sheridan, called for calm on the issue, instead indicating the industry would have to adapt to any new competition in the sector, whether subsidised by government or not.

“I think we have to let some of this play out,” he said. "Innovation will take over; I’ll be driving my sales team to get out there and compete.”

He confirmed the number two telco would look to play as a retail service provider to on-sell satellite services under the NBN, which will replace the Australian Broadband Guarantee from July this year, which Optus currently offers to rural customers.

Ballintine, who repeatedly referred to NBN Co as a “wolf in sheep’s clothing”, suggested industry self-regulation around the process - and potentially the intervention by the competition watchdog - could prevent the wholesaler from moving into the satellite utility market.

However, he remained concerned that the company could use the mission creep as a means of better selling the satellite aspect of the project to debt funder.

“I would think the deployment of two satellites for 300,000 people is a lot of satellite,” he said. “One of the ways that they might try and make it economically viable is for bracket creep.

“I think it’s repugnant that taxpayers would be horrified they were propping up oil, mining, gas companies through subsidies.”

In an email, an NBN Co spokesperson told Computerworld Australia that any contact with end-user companies were more likely market research to determine the construct of potential services offered by the company.

"We remain a wholesaler, but a diligent wholesaler who is working to develop the products that will be useful to RSPs in their sales activities," they said.

NewSat has moved in the past to win contracts under the satellite portion of the NBN, but Ballintine said the wholesaler was yet to contact his company.

Follow James Hutchinson on Twitter: @j_hutch

Follow Computerworld Australia on Twitter: @ComputerworldAU

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Tags NBNNational Broadband Network (NBN)NewSatCommsday Summit 2011Adrian Ballintine

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