Telcos seek shorter NBN framework

Internet service providers have come out swinging against NBN Co’s proposal to establish a 30-year regulatory framework on the National Broadband Network.

The term, which would not be reviewed in full until 2027 under NBN Co’s proposal, sets out the regulation and pricing terms under which the monopoly wholesale provider will operate over the next 30 years.

Responding to the competition watchdog’s second round of public consultation on NBN Co’s proposed Special Access Undertaking (SAU), ISPs including Optus, AAPT, Macquarie Telecom and iiNet warned that the proposed term would remove any regulatory recourse should disputes with the network builder arise.

Optus said the term was “unprecedented and inconsistent with the interests of access seekers and end‐users”, noting that the ACCC had objected previously to a proposed 15-year regulatory framework as being too long (pdf).

“Whilst Optus recognises the need for some level of certainty over access terms, NBN Co’s proposal risks locking the industry into a set of regulatory arrangements that may become outdated and unresponsive to the market conditions and the needs of end‐users,” it said.

AAPT and the Competitive Carriers Coalition proposed the term be shortened to ten years while a joint submission from iiNet, Primus and Adam Internet (pdf) pushed for the ACCC to only accept the 30-year term if NBN Co ceded more regulatory power.

Vodafone Hutchison Australia, which is currently running its first fixed line trials on the network, also appeared to change its position on the issue.

Although it had previously accepted the framework term as reasonable, the company used its second submission (pdf) to point out that the SAU’s bias toward NBN Co - in some aspect at the expense of ISPs - would be exacerbated over 30 years.

“That said, if the bias in the SAU is removed, a longer term may appear more reasonable for the SAU,” the company wrote.

Telstra had not submitted its views on the supplementary inquiry at time of writing but has previously called for changes to the proposed timeframe.

ISPs were concerned about a lack of clarity over the difference between the regulatory framework and changes that could be made to individual contracts with access seekers.

The contracts are set to expire next year, with further revisions likely to be re-negotiated every five years.

Many ISPs have also questioned the extent of the ACCC’s power to award regulatory recource during the 30-year term of the SAU, should the undertaking be accepted in its current form.

NBN Co has repeatedly sought to defend the proposed term, which would not be completely reviewed before 2027 under current proposals.

It said the proposed term would provide regulatory certainty in order to promote investor confidence in the network, and issue particularly pertinent for the company’s future plans to raise $9 billion in equity from debt markets after the 2013 federal election.

The ACCC is set to hold an industry forum this month to flesh out criticisms of the regulatory framework, but is not due to make a final decision on the issue until June.