Vocus wants government to intervene on NBN Co

Vocus wants government to stop NBN Co from bending the rules in pursuit of business customers.

Vocus CEO Kevin Russell. Picture: Hollie Adams

Vocus boss Kevin Russell has urged the Morrison government to step in and stop NBN Co from bending the rules in pursuit of business customers.

In an attack on NBN Co’s current practices, Mr Russell said the broadband company had deviated from its original remit and was not operating as a wholesale access provider.

“Is NBN ‘wholesale-only’ when it proactively contacts one of your customers, and directly negotiates a contract that sets out buying commitments and terms of service?” Mr Russell asked at the CommsDay Melbourne Congress on Thursday.

“Is NBN ‘non-discriminatory’ when it advocates for end-users to take up a 100 per cent NBN solution, then promotes certain retailers to deliver it?

“Is NBN ‘wholesale-only’ when it signs contracts directly with end-users to ensure long-term use of new fibre, when that customer has a separate contract with the retailer?”

Mr Russell says the federal government should issue NBN Co with new directives that force it to prioritise under-served areas rather than waste taxpayers dollars overbuilding existing fibre networks in the cities.

“The government needs to issue NBN Co with a new ‘statement of expectations’ to provide it with clear policy objectives in enterprise,” he said.

“Because in the absence of long-term policy objectives, NBN’s behaviour is being driven primarily by the need to fill a financial hole,” he said.

The policy vacuum, according to Mr Russell, is responsible for the behaviour that prompted the Australian Competition and Consumer Commission to issue a formal warning to NBN Co on Wednesday for favouring some telcos over others.

“The ACCC (has) issued its first formal warning to NBN for breaching its non-discrimination obligations, by offering ‘materially different commercial terms’ to RSPs for enterprise infrastructure upgrades,” Mr Russell said.

“This is a welcome development – but is it enough?”

Mr Russell said Vocus saw a positive role for NBN in enterprise “where we can work with the customer to determine the most economically efficient blend of our own fibre, NBN’s fibre, and that of any other wholesale provider”.

“However it is not economically efficient when NBN promotes its own fibre, to the exclusion of all others,” Mr Russell added.

Vocus’s criticism follows that of incumbent telco Telstra, which last month labelled NBN Co’s intrusion into the business market “surprising”.

NBN Co’s push into business is a direct threat to the high margins Telstra garners from its business customers. However Vocus’s concerns highlight a deeper anxiety in the sector from telcos that have fibre infrastructure that competes with the NBN.

While the NBN breaks Telstra’s stranglehold it also threatens to undermine the value of the networks built by the likes of Vocus and TPG Telecom.

According to Mr Russell, NBN Co should drive its fibre into areas where Telstra is the only service provider.

“NBN’s enterprise business is generating revenue of close to $400 million and is expected to hit $1 billion in coming years.

“An updated statement of expectations should lay out some clear ‘rules of engagement’ for NBN in enterprise.

“To encourage private investment and to deliver the network at least cost to taxpayers, NBN should only build to enterprises which currently have no fibre, or only one fibre provider,” Mr Russell said.