On 24 February 2010, the Federal Government released an exposure draft of the National Broadband Network Companies Bill 2010 (Draft Bill) which outlines the framework for the operation, ownership, governance and sale arrangements for the National Broadband Network company, NBN Co Limited (NBN Co).

Key provisions of the Draft Bill include:

  1. Wholesale supply only, subject to exemptions: NBN Co must only supply eligible services to carriers and service providers (section 9). This provision implements the government's original intention for NBN Co to supply services on a wholesale basis. However, the Communications Minister is given discretion to apply exemptions to certain services.
  2. No content supply: NBN Co must not supply a content service.
  3. Commonwealth majority ownership: The Federal Government must retain majority ownership of NBN Co until the Communications Minister declares that the National Broadband Network should be treated as built and fully operational. The Draft Bill provides for this declaration to occur by 30 June 2018 (but this period may be extended by declaration).
  4. Transfer of Commonwealth ownership: Within 5 years of the Communications Minister's declaration, the Commonwealth Government's remaining equity in NBN Co must be transferred to other persons. This 5 year period may be extended by up to an additional 12 months.
  5. Private ownership controls: NBN must take all reasonable steps to ensure that an unacceptable private ownership or control situation does not exist in relation to NBN Co. The Draft Bill provides for the making of regulations (under section 41) to determine the scope of an "unacceptable private ownership or control situation". The ACCC is given power to make administrative decisions relating to matters raised under such regulations.

Industry concerns

The Draft Bill has raised concerns within the industry because the Communications Minister's discretion under section 9 allows NBN Co to offer services directly to certain end-users such as government agencies. This could potentially undermine the original intention for NBN Co to be a wholesale-only supplier and may lead to NBN Co competing with other carriers/carriage service providers.

Additionally, some telecommunications providers are concerned by aspects of the Draft Bill which indicate that despite the Government's original intention, in practice NBN Co may not be a strictly wholesale supplier. This is indicated in the Explanatory Memorandum for the Draft Bill: "The Government's clearly stated policy is that NBN Co is a wholesale-only company. However, the Government considers that NBN Co should not be prevented from purchasing telecommunications companies, even if they have retail businesses, if such an acquisition could support the early development and rollout plan of the NBN."

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