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back to article Professors slam Oz HFC wholesale shutdown

Two regular contributors to Australia’s industry regulation debates have penned a paper slamming the proposed “Telstra-NBN” deal. Under the deal, which is under consideration by the ACCC, Telstra is to withdraw from fixed line services as the National Broadband Network fibre is rolled out. In addition, both Telstra and Optus …

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Funny that

"...Their inputs have covered not only the telecommunications industry, but the airline sector, petrol pricing, and retail energy deregulation...."

So these two foreigners have had a finger in all these Australian disaster stories?

I'm starting to see the problem.

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Headmaster

Not so funny...

"So these two foreigners have had a finger in all these Australian disaster stories?"

Joshua Gans is Australian - born in Sydney, educated in Brisbane, worked as an academic in Sydney and Melbourne - but don't let that get in the way of your rabidly xenophobic parochialism.

That said, while I've been a long-time occasional reader of his blog, and he's one of the few economists I think occasionally makes sense, I've always disagreed totally with his hands-off laissez-faire attitude towards the telco sector and his associated issues with cross-subsidisation.

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They both miss the point

These two commentators both seem to miss the point here. The NBN is being built as a government-subsidised open network to break the current monopoly. The Howard government created a monster of a fixed-line monopoly when they privatised Telstra, the company that owns the only copper network and the largest of the HFC networks.

Keeping rural access costs equivalent to metro costs is important, as allowing the market to determine rates would cause the NBN to be inaccessable to at least 10% of the population due to cost. It is nearly impossible to get any internet service other than Telstra ADSL or 3G outside of regional centres, and competition can only exist if it is cost-competitive.

Telstra's HFC network currently only covers metro areas that generally have access to ADSL2 and/or the Optus HFC anyway, and being a closed network, is not of any use to anyone other than Telstra or Foxtel. I don't imagine than with the NBN rollout, there would be any telco who would want a redundant HFC network and its associated cost; requiring Telstra to shut it down just ensures that their monopoly on fixed lines is broken, and there is no needless duplication.

The NBN should be something of pride to Australians, enabling everyone equal access to the internet and reflecting our egalitarian values. Leaving something as important as telecommunication to private business has enabled some great innovations, but by allowing the government to build national infrastructure such as this, can allow freer access to all.

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Mushroom

Excellent!

If these guys are against it it must be a good idea!

Seriously, with the track record of economists in general and academic economists specifically, why would anyone give a rats toss bag what they think?

I wonder if anyone has a business model that involves polling economists and then doing the opposite of what the majority opinion is...

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more pinstriped pirate friends ?

odd how Oz experts seem to think everyone should live in the financial districts of two cities.

The idea that Oz has a very non-standard population layout is off limits for most advisors instead of accepting that unlike USA and Europe, Oz is a few cities separated by SFA. The nearest equivalent example in the northern hemisphere is the Russian Federation.

However the one consistent pattern experts and gov decisions of all kinds show in Oz is that monopoly /oligopoly pricing is still highly desired by public and private bodies. So we who live outside the cities will continue to pay high prices for basic communications, assuming it can be bought at any price. The pain is then increased by lectures about user pays, efficiency, cost reductions and the need for high speed connectivity. Straight after the lecture, telco PHBs will get another multi-million annual bonus. Shortly after another qango will spend millions investigating why the city/country divide and disengagement with political processes is growing.

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