Telstra slaps down direct NBN Co access for utilities

Allowing utlities to direct-source carriage from the NBN Co would undermine wholesale-only access regime of the NBN

Telstra has argued that utilities companies should not be able to source carriage services from the NBN Co directly, instead that retail services providers, such as itself, be allowed to continue charging the sector for connectivity.

“We believe retail service providers will want to provide services to the utilities and the types they will want in the future,” Telstra director government relations, James Shaw, said at a Senate hearing into the National Broadband Network Measures-Access Arrangements Bill 2010.

“It is an area in which there is already competition and there should be no need for these organsiations (utilities) to deal directly with the NBN.”

Shaw said utilities should be reassured by the history of innovation in the sector, the ability of service providers to meet consumer needs, and the willingness of telcos to invest in service provision.

“If we can make a buck out of it then we will invest in it and we believe providing a service in the NBN world is worth a buck,” he said.

“If [utilities] believe we are not providing a service there is an option to go elsewhere in the sector and there is the option of getting a carrier licence.

"I don’t think there’s only one shot in the locker here.”

Shaw added that allowing utilities to gain carrier licences for self-supply direct from NBN Co was working against the intent of the NBN in providing a wholesale-only service.

“Therefore it should be provided to carriers and carriage service providers to then onsell it to consumers – be they large businesses or households,” he said.

Allow volume discounts, Telstra says

Shaw also repudiated the argument that allowing NBN Co to offer volume discounts on the National Broadband Network will unfairly favour the nations number on telco and internet service provider.

Speaking at a Senate hearing into the National Broadband Network Measures-Access Arrangements Bill 2010, Shaw said volume discounts could equally favour smaller service providers.

“Where they aid efficiency we think it is a good economic concept, which is applies in a number of markets across the economy, generally,” he said.

“So long as [volume discounts] abide by the criteria of aiding efficiency we don’t think the could be restricted to Telstra; it could apply to any nimble organisation.

“It is not something for Telstra’s benefit only. It is for any organisation that can aid the efficiency of the NBN Co in providing services to consumers.”

The sentiment echoes Optus, which also argued at the hearing that volume discounts should be allowed.

“What we are trying to do is mirror normal commercial negotiations and commercial practices... which say that if you are helping the supplier in their costs to you — effectively aiding efficiency — then there should be some recognition for you of that in commercial discussions.”

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