Feeds

Proposed NBN 'retail restraint' law is bad for everyone

The tortuous and ignorant debate over 'retail creep'

Choosing a cloud hosting partner with confidence

Comment On the face of it, the Liberal Party is showing a laudable determination to ensure that NBN Co – the government-owned corporation set up to build, own and operate Australia's National Broadband Network – doesn't cut out the existing retail market by selling directly to customers.

Hence its proposed legislative agenda that would forbid NBN Co selling services directly to organisations such as electricity utilities.

The coalition's idea goes further than that, insisting that NBN Co's customers should not buy NBN services to carry traffic on their own internal networks.

In proposing an artificial distinction between "internal" and "customer" traffic, the coalition is either plumbing new depths of stupidity, or it has conceived a new way to white-ant the project.

Define 'customer'

A number of utilities already hold telecommunications carrier licences in Australia. These include VicTrack, ETSA Utilities, Jemena (formerly Alinta), Country Energy, Ergon Energy, Aurora and RailCorp.

With the exception of VicTrack, these same companies do not, however, have much in the way of retail telephone or broadband services to offer – so why are they carriers?

They hold licences because they need to comply with Australia's Telecommunications Act, which demands licensing of anyone who owns network infrastructure that brings them under the definition of "carrier". They need network management; their scale brings them under the purview of the Act, so they hold licences.

If any of these utilities decided to offer retail services, they already have the legal status to do so.

The coalition realised that it couldn’t ban particular industries from holding carrier licences, so instead, they want to regulate the kind of traffic retailers can carry on their NBN connections. They propose an explicit provision in legislation that NBN Co services can only be used for the purposes of on-selling those services to end users.

A carrier, according to the Liberals' proposal, would not be able to use services purchased from NBN Co for their own "internal use".

Even if you agree that the industry at large must be defended against the threat of NBN Co becoming a vertically-integrated retailer, banning carriers from putting "internal use" traffic on the NBN is a very bad idea.

Let's look at traffic that networks must have, but which can't be sold on to end users:

  • Diagnostics – A retail provider will want its diagnostics and network management to reach all the way to the ONT (Optical Network Terminal) in the customer’s premises.
  • Billing – Retailers will also interact with the NBN at points of interconnect, which is where they’ll exchange billing and other management traffic.

People create converged networks because they are more efficient than maintaining multiple, parallel network infrastructures. Eliminating converged networks by legislative fiat is complex and inefficient – and it favours those carriers who, like Telstra, maintain extensive fibre networks distinct from the NBN.

The answer, the bush lawyer will tell you, is to draft "technology neutral" legislation that can exempt whatever is necessary to the normal operation of the retailer's network.

The problem then becomes a definition of "necessary". Sure, network management traffic is "necessary" to the normal operation of a service over the NBN. But where would such legislation draw the line around what is necessary?

Would the coalition really expect a provider to send reports from the CRM system over one network, while using a different network when customer traffic is involved?

Punishing the wrong people

The carriers most disadvantaged by a forced and artificial restraint on their use of an NBN connection would be the small carriers.

Telstra's national fibre network already serves most of its 5,000-plus exchanges and a host of business locations. ISPs such as Internode and iiNet don't own or have access to a comparable footprint – their internal operations would be constrained by a law preventing them from (for example) including that connection in their purchases from NBN Co – they would need to buy a retail service from some other retail provider.

All of this is proposed by the coalition, purportedly to prevent utilities decimating the telecommunications industry by buying NBN connections for smart home networks.

Smart metering isn't even that interesting to carriers: it's not lucrative and it doesn't generate much traffic. That's one reason that the utilities have had to create their own industry lobby to try and get mindshare for "smart grid" applications.

The coalition isn't about protecting the telecommunications industry: it's about imposing inefficiencies on the NBN, so as to further undermine the whole project. ®

Security for virtualized datacentres

More from The Register

next story
TEEN RAMPAGE: Kids in iPhone 6 'Will it bend' YouTube 'prank'
iPhones bent in Norwich? As if the place wasn't weird enough
Consumers agree to give up first-born child for free Wi-Fi – survey
This Herod network's ace – but crap reception in bullrushes
Crouching tiger, FAST ASLEEP dragon: Smugglers can't shift iPhone 6s
China's grey market reports 'sluggish' sales of Apple mobe
Sea-Me-We 5 construction starts
New sub cable to go live 2016
New EU digi-commish struggles with concepts of net neutrality
Oettinger all about the infrastructure – but not big on substance
PEAK IPV4? Global IPv6 traffic is growing, DDoS dying, says Akamai
First time the cache network has seen drop in use of 32-bit-wide IP addresses
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.