Conroy scales back NBN cherry-picker clauses

The Federal Government has proposed changes to the NBN Access Bill that could appease network builders by exempting many of them from tough anti-cherry-picking rules.

After months of industry backlash, Communications Minister Stephen Conroy sought to limit the scope of the rules – which had been designed primarily to shield NBN Co from being undermined in metropolitan areas.

But Conroy stopped short of deleting the rules altogether, as had been proposed by the Coalition and several ISPs.

The proposed anti-cherry-picking rules would force carriers that built new or upgraded existing fibre networks to provide an open access, wholesale service to internet retailers.

They were viewed by the Government as necessary to stop the private sector cherry-picking low-cost, high-density areas to build or upgrade high-speed fixed networks before the NBN could arrive.

New exemptions

Under the proposed revisions, providers of backhaul networks and those who serviced only corporate and government clients would no longer be captured by the laws.

The laws would only apply to network operators servicing residential, sole trader and small business customers that employed up to 15 people, according to a revised explanatory memorandum.

Other exemptions were proposed in Section 141B, which had the effect of stopping greenfields network builders and minor local fibre upgrades from being unnecessarily caught in the cherry-picking net.

"The deemed network extension rule will not apply to extensions of a telecommunications networks where a part of the infrastructure of that network is physically located in a particular area that is being or was developed as a particular stage of a real estate development project and the network is extended to another area that is being, or is to be, developed as another stage of the project," the memorandum noted.

"This exemption provides certainty for carriers that have already rolled out networks in parts of real estate developments that they can continue to roll out in other parts of the same development without being subject to proposed subsection (2).

"Furthermore, proposed subsection 141B(4) provides that the deemed extension rule... does not apply to extensions of a telecommunications network that was in existence before 1 January 2011 and which is extended on or after 1 January 2011, and no point on the infrastructure of the extension is located more than one kilometre (or a longer distance is specified in the regulations) from a point on the infrastructure of the network as the network stood immediately before 1 January 2011.

"This exemption will clarify that carriers may build minor extensions adjacent to their existing networks without being subject to subsection (2)."

Other changes

Besides addressing the cherry-picking furore, several other amendments to the Access Bill were proposed.

They included a section that gave NBN Co the power to refuse to interconnect at points of presence not specified by regulators.

Another section would limit the amount of cross-subsidisation that NBN Co could impose on metropolitan areas to pay for the network build in less economic regional and rural sites.

The Government also sought to make changes to the NBN Companies Bill that would exempt any deal between NBN Co and Telstra from state stamp duties or other taxes.