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

I move opposition amendment (7) on sheet 7049 revised:

(7)    Page 36 (after line 4), after clause 41, insert:

41A  Restrictions on services higher than Layer 2

        (1)    An NBN corporation must not supply an eligible service that is higher than Layer 2 in the Open System Interconnection (OSI) Reference Model.

        (2)    The Minister may, by legislative instrument, exempt a specified eligible service from the operation of subsection (1).

        (3)    The Minister must not make or vary an instrument under subsection (2) unless the Minister is satisfied that the instrument complies with the following network layer principles:

             (a)    an NBN corporation should not supply services at a layer in the network hierarchy of the national broadband network that is higher than Layer 2 unless the relevant demand cannot be satisfied by means of the provision of a service at Layer 2;

             (b)    an NBN corporation should not supply services at a layer in the network hierarchy of the national broadband network other than the lowest technically feasible layer;

             (c)    an NBN corporation should not compete for the supply of services if competition for the supply of the same or equivalent services already occurs, or if there is a reasonable prospect that competition for the supply of the same or equivalent services will occur;

             (d)    the proposed exemption will assist to promote competition in downstream wholesale and retail markets.

        (4)    Before making or varying an instrument under subsection (2), the Minister must:

             (a)    cause to be published on the Department’s website a notice that:

                   (i)    sets out the draft instrument or variation; and

                  (ii)    gives the reasons why the Minister is satisfied that the instrument or variation complies with the network layer principles; and

                 (iii)    invites persons to make submissions to the Minister about the instrument or variation within 14 days after the notice is published; and

             (b)    ask the ACCC to give advice to the Minister, within 28 days after the publication of the notice, about the instrument or variation; and

             (c)    consider the advice and any submissions.

The amendment is related to placing a restriction on services higher than layer 2. It inserts after clause 41 in the bill a new clause, 41A, that outlines these restrictions. I would hope this is an amendment that the minister would welcome, because we have learnt from the debates we have had tonight and earlier this afternoon on the provision of wholesale only services that the minister seems to place almost the entire emphasis on the type of service that is being sold as being the preventative mechanism to stop NBN Co. from moving up the value chain and from engaging in some type of scope creep, or mission creep as it has been termed by many.

Given the minister has rejected out of hand, and unfortunately the chamber has rejected, amendments that the opposition sought to move that would have more clearly defined the wholesale only operations of NBN Co. and would have sought to ensure that NBN Co. was a wholesaler in the generally understood parlance of the term and generally accepted notion of the term ‘wholesaler’—that is, someone who takes a product and sells it to a retailer who onsells it to an end user—the government has left open numerous opportunities for NBN Co. to directly sell products to end users.

But the minister’s defence throughout this debate as to why he thinks it is acceptable in his definition of a wholesale only carrier for NBN Co. to sell direct to an end user has been based entirely on the type of service that is being provided. That type of service that he says is being provided is a layer 2 bitstream service. However, the bill does not provide for absolute clarity around that type of service. The bill does not provide a guarantee that NBN Co. will not engage in mission creep in who it sells to. It also has the potential to engage in mission creep in what it is selling. If we cannot close at least one of those doors, we have a real problem.

The minister has not allowed us to close the door in relation to who NBN Co. is selling to, so instead we seek the support of the chamber to close the door in relation to what it is selling. But, just as the minister made it clear in previous comments that he was not going to attempt to define for the chamber the technical specifications and differences between a layer 2 bitstream service and higher value services, I am not about to attempt to do that. Importantly, the amendment does not attempt to do that. The amendment makes it clear that in fact what it does is empower the minister through the capacity of regulatory power to put a restraint on NBN Co. from moving up the value chain in this regard. This is about empowering the minister to be able to do what he says this legislation is about and to be able to ensure that NBN Co. is providing what he has defined to be the wholesale only service, even though he wants to define ‘wholesale’ in terms of the product that is provided. That is fine; here is his opportunity to define wholesale in terms of the product that is provided. This amendment seeks to do that. In seeking to do that, it therefore again is an attempt by the opposition to keep the government to its word to the public, the industry, consumers and the parliament about what its mission for the NBN Co. is.

Why is it important to ensure that the product of NBN Co. has a limited offering? It is important because we want the minister to foster maximum competition at the retail end. We want to make sure that NBN Co. is not shutting out the potential for innovation and product development by retail service providers. We want to make sure that it is offering a flat, uniform service that is available to retail service providers for them to be able to innovate, value add and provide competitive outcomes.

This is an amendment designed, Minister, to empower you so that, in the operation of this act, ultimately you will be able to ensure that the mandate that you claim to be giving NBN Co. is adhered to by NBN Co., that it is the mandate that they operate by, without the potential need to come back to this chamber in future years and seek tighter amendments because you suddenly discover they have strayed outside their brief; they have strayed into areas that you wish they had not. I know that these are technical areas and issues, but equally I know that Senator Ludlam and others have looked at these issues. I hope they recognise that there is some value in providing the minister with this power and, in doing so, providing the minister with the capacity and opportunity to ensure that he and future ministers can keep NBN Co. to the mandate that you have told all of us today and many times prior you believe the government is giving them and wants them to operate within.