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:
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.
No content supply: NBN Co must not supply a
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).
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.
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
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
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."
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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