Telstra fears IP rules will kill off NBN ideas forum

No incentive to participate?

Telstra has asked NBN Co to "re-cut" intellectual property rules it fears will kill off any chance of having ISPs contribute ideas for future products for the National Broadband Network.

The request is one of a raft of changes that the incumbent is proposing to the latest version of NBN Co's special access undertaking, which is currently under regulatory review.

Telstra's concerns over intellectual property go to the heart of the operation of NBN Co's Product Development Forum, which allows wholesale customers to submit "Layer 2, Ethernet Bitstream" ideas to NBN Co, which will evaluate and potentially develop them into commercial products.

The forum takes ideas from any customer with an NBN wholesale broadband agreement.

However, Telstra has warned NBN Co that it is testing the willingness of wholesale customers to bother with the process at all.

"The [current] regime falls short in terms of [retail service provider protections required to encourage innovation under the [Forum]," Telstra noted. (pdf)

"Accordingly Telstra submits that the product development IP and confidentiality commitments should be re-cut by NBN Co to address the specific concerns raised and reflect ... high level principles that Telstra proposes".

While acknowledging NBN Co's need for "confidence" that it has the IP rights required to commercialise products from the Forum, Telstra wants NBN Co to agree to terms to license the required IP on a case-by-case basis to "enable RSPs to get commercial return on [their] contributions".

"Inadequate protections for [retail service providers' intellectual property rights], and a failure to adequately compensate RSPs for value in those [rights], will impact on a [provider's] ability and willingness to submit product ideas to NBN Co," Telstra warned.

"Overly restrictive [intellectual property rights] requirements, and unrealistic price demands, will impact on NBN Co‟s ability to effectively develop product ideas."

Effectively, Telstra is seeking a commitment that whatever ISPs contribute to the Forum remains their licensable property.

The carrier also wants NBN Co to relax a requirement that the ISP identify its claimed IP when an idea is submitted.

Upfront identification of claimed rights, at a time when the idea is likely to be embryonic and could be subject to further joint development, puts the ISP at a disadvantage, Telstra argued.

Telstra also sought tightening of an "internal use" license that was to be granted to NBN Co, arguing its current definition is too broad and again potentially disadvantaged the ISP who submitted the idea.

A related set of clause changes are proposed for the way NBN Co handles confidential information that is submitted as part of an idea.

"In developing product ideas, information about those product ideas will necessarily need to be shared with a wider audience (including other industry participants) at some point in time.," Telstra noted.

"Accordingly, NBN Co will work with each participating RSP, in good faith, with a view to agreeing terms that will protect the confidentiality of commercially sensitive RSP information while enabling NBN Co to effectively develop product ideas."

An NBN Co spokeswoman pointed iTnews to supporting submissions made to the ACCC late last year, which stated the company had "consulted extensively" with wholesale customers already in determining its position on intellectual property rights.

NBN Co said its current position was designed to ensure "that the process is not 'gamed' to hinder product development, stifle innovation and divert resources away from legitimate ideas for products."

It is not the first time the Product Development Forum has come under scrutiny. Late last year, NBN Co complied with a regulatory demand to guarantee it will not pull initial access products and services from sale without a minimum 12 months notice to ISPs via the Forum.