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Photo: Andrew Meares Nick Xenophon … backing the legislation.

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Pricing for NBN comes under fire

The federal opposition has mounted a last-ditch effort to stymie the national broadband network by delaying until Monday a vote on the bill to structurally separate Telstra. Yesterday, as the government brushed aside the concerns of 10 chief executives from small carriers regarding affordability of internet services, the opposition successfully employed tactics to mire the Senate in procedural quicksand and delay the vote as long as possible.
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The two independent senators, Steve Fielding and Nick Xenophon, and the Greens support the bill to separate Telstra’s retail and wholesale arms, which is critical to the $35.7 billion network being introduced. The vote to structurally separate Telstra was scheduled for Wednesday night, but the Coalition succeeded in shutting the Senate down at 7.20pm and yesterday, used procedural tactics to further the delay until Monday. There was tension yesterday when the government tried to water down the agreed amendments, under pressure from Telstra. The government has been under fire for being unable to ”land” its policies and needs to go to the Christmas break with the legislation under its belt. The deal involves Telstra being paid $13.8 billion for the use of its infrastructure to roll out the national fibre network. The delay forced MPs and senators to sit on Monday, at a cost of hundreds of thousands of dollars. Shareholders must vote to approve the deal early next year. The opposition used the delay to pressure Senator Xenophon to change his mind, but both he and Senator Fielding said last night they would not move. Senator Xenophon won several concessions from the government, including amendments to increase competition and to ensure all retailers receive access to the network equal to that of Telstra. During the last question time for the year, Ms Gillard rounded on the Opposition leader, Tony Abbott for the delaying tactics. Parliament was due to rise for the year last night. The biggest investor in Telstra, the Future Fund, said yesterday it would not guarantee its support for the deal between Telstra and NBN Co until it saw more details. ”I expect everyone to stick to the agreement.”

After the government this week released a business case summary, the chief executives of the 10 telco firms that make up the Alliance for Affordable Broadband wrote to the chairman of NBN Co, Mike Quigley, saying a failure to allow price falls would limit competition. But Senator Xenophon stood firm. The Prime Minister, Julia Gillard, rejected the criticism from the Alliance, saying real prices would fall once inflation was taken into account. Independent analysts also raised doubts over the pricing strategy, saying it went against the experience of most new telecommunications networks. ”It’s time to stop being stranded as human history marches past you,” she said. She said he was good at running a protest vote in the lead-up to an election but ”you can’t run one over three years”.

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