Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Hansard source

Chairman, I am attempting not to be provoked. Minister, through you, Chairman, this bill is attempting to constrain—allegedly—what NBN Co. can do. This bill is meant to be about ring-fencing NBN Co. and putting a barrier around it to ensure that it is a genuine wholesale only provider. We think that that is a wise intention: if you are going to construct this thing it should be a wholesale only provider. That is not an unreasonable intention—in fact, that is exactly what the intention should be and you should be held to account on that.

That is what we believe should be the outcome from this legislation and that is why we are concerned about the definition you have given in the clause that relates to the supply of services on a wholesale basis. From the evidence provided, it appears that it is wide open to potential abuse. We would rather knock that abuse out from day one than risk the type of mission creep that is of concern and risk getting to a position where NBN Co. is able to abuse its position and pick-off profitable customers from the retail service providers.

If you want to set up NBN Co. as a genuine wholesale only business we invite you to narrow your definition to ensure that it is only a wholesale only provider. The minister seems to be putting his entire faith—not in his clause related to whether or not it is a wholesale only provider—in technical definitions of the type of service NBN Co. will provide but not who it will provide to. We do not think that that is good enough because there is still some debate to be had about whether those technical definitions are satisfactory.

Putting that aside, as the minister well knows, technology in this area shifts rapidly and the potential capacity of retailers to convert that layer 2 bitstream service in the future into something that they can use in a cost-effective manner may expand significantly. What if that happens? Why not make the ring fence tighter from day one? Why not ensure from the outset that you protect the market, NBN Co. and the consumer from having NBN Co. stray into this retail space? Just as Telstra highlighted in their evidence questions about the terms ‘carrier’ and ‘carriage service provider’, they equally highlighted questions in relation to the definition of service providers. In their submission Telstra argued:

An entity may become a [carriage service provider (CSP)] by reason of supply of one particular kind of service – for example, a supermarket chain that is a mobile reseller. Such an entity would operate under the CSP class licence, and – under the proposed NBN Companies Bill – could acquire all of its fixed services from NBN Co directly, even though they may be entirely unrelated to functions as a mobile reseller.

Nothing the minister has said provides the clarity or the comfort or the certainty that this bill, or any of the amendments he is proposing, will eliminate the potential for the misuse of these definitions, will eliminate the potential that NBN Co. could become effectively a provider of retail services. I again emphasise that just relying on the technological definitions, just relying on where NBN Co. may or may not be able to draw the line on exactly what technical services it provides, is not good enough, because the technology and the ability to use that and adapt to that and the cost of doing so will inevitably and invariably change in years to come.

What is important in this case, what is significant, is making sure that, if you are true to your word, if you genuinely mean what you have been saying in your implementation study, in all of your speeches in this place and in all of the documents that have been outlined, NBN Co. is actually as you have promised and stated time and time again—a wholesale-only network. A wholesale only network, by anyone’s definition, by the definition of any layman or anyone walking down the street, should surely be a network that provides services only to retailers who on sell them. It should be that simple. That is all the opposition in this amendment is trying to achieve—to distil it down to those basic few words.

If Senator Ludlam or Senator Xenophon have concerns with aspects of our amendment, let us look at them and let us fix the problems, or let us look at an alternative. What we should be expecting here is a very clear ring-fencing, as I have put it, of NBN Co. that ensures it is a wholesale-only network, as the government has promised. That is what we urge the chamber to support. The current definitions in the bill are not satisfactory in that regard; they do not provide that protection. I would urge the minister to outline exactly why he thinks this very open definition in clause 9 that he has is somehow going to prevent that.

It seems the minister has indicated he actually does not think it is going to prevent that and he does not think there is anything wrong with it. Well, if you do not think there is anything wrong with it, then please explain to us why you think, having proclaimed the virtues of NBN Co. being a wholesale-only network, it is appropriate for them to be able to sell services directly to end users. Tell us why you think that. Why have you changed your mind? Why do you want to provide capacity for NBN Co. to step into providing services direct to end users and therefore be a retail provider. Why do you think that that is a reasonable thing? Tell the Senate that; be honest about your intentions in this regard. If you let the bill go through in its current form without changes to this clause, without accepting the opposition’s amendment or proposing some other substantive alternative, your words that this is to be a wholesale-only network will ring hollow to anyone in the sector who cares to look at this bill. It will be clear to all that your intention is to allow NBN Co. to engage in this mission creep.

Why will that be your intention? I have no doubt that will be your intention because you need to get some return; you desperately need to somehow provide the capacity for NBN Co. to provide some return on the billions of dollars of taxpayers’ money that is being pumped into it. Quite possibly the only way you are going to be able to get that return is to allow them to engage in this sort of mission creep, to allow them to stretch their mandate beyond being a wholesale-only provider into providing these sorts of retail services. Is that the reason? Is that why you are happy to provide this unsatisfactory definition of wholesale-only services? Are you happy to leave it this open? Your hope, really, is that the only chance for NBN Co. to provide the returns to government that the government claims to be seeking is for it to actually stretch its mandate, is for it to cherry pick profitable retail customers off those retail service providers and make sure that it provides a service directly to them.

Is that what you are expecting? Is that what you think is going to be the outcome here? Is that why you are rejecting any means of tightening the definition of this? If it is, it shows just how unsatisfactory your approach to this whole issue is, just how hollow your words are, just how shameless the approach is when you say one thing about it being a wholesale only network but then when it comes to the legislation, when it comes to the nitty-gritty on how NBN Co. is going to work, you do something quite different by simply defining that it can provide services to a carrier or a service provider, knowing full well that the definition of those words will allow service provision to a whole range of other businesses and entities, will allow NBN Co. to get into providing direct services to retail customers. Why not support the opposition amendment that satisfactorily ring-fences it, that ensures—