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back to article Keep monopoly or make network expensive, NBN Co warns

Australia doesn't need to revise its telecomms competition policy, says NBN Co – except if the policy is interpreted as allowing infrastructure-based competition to its national network. That's the conundrum the company building Australia's reduced-scope national broadband network has raised in its submission to the …

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  1. dan1980

    Right-o

    So, first we have a promise of a FTTP network, then we have a change of government and they axe that idea, telling us 640KB ought to be enough for everyone*. Now, we have consternation that private companies are stepping in to roll out their own FTTP networks and thus making the cut-down FTTN offerings of the NBN seem less enticing.

    The first thing to point out is that this is the 'free market' at work. This magical mechanism is touted by the coalition as a panacea to any and all ills. If a government service is having problems, privatise it and let the free market sort it out. Right down to basic utilities and infrastructure.

    The coalition always claims that privatisation will push prices down so what are they worried about? Or does that only work for power, water, roads, transport, health and student loans,?

    The second is that 'cherry picking' is precisely what is happening under the new NBN regime. Only installing high-quality/speed services in areas where it is cheaper to do so is functionally the same as only installing them where it is more lucrative - both are about adding more subscribers for lower outlay.

    The last thing would be to ask why the Malcolm & Tony's Broadband extravaganza has anything to fear from these competing offerings. After all, they have asserted that people simply don't need and won't use the bandwidth of a FTTP link so presumably anyone signing up to a third-party service will be grossly over-paying based on what they actually need. Again with the free market, surely those people would gravitate towards the service that best fits their needs, which would of course be the NBN.

    * - Doesn't really matter if that was ever said . . ."

    4 2 Reply
  2. Jim84

    Country Bumpkins can do one

    Hold on. I am one of those metro apartment dwellers, but if I am reading this correctly the NBN wants to stop TPG giving ne the option of fibre because it wants to charge me more to subsidize building fibre out to country towns? Seems like a bit of a statist solution if you ask me.

    2 7 Reply
  3. Originone

    The private networks should totally be allowed to build FTTP any where they want except where NBN Co has already or plans to (I can't imagine they would want to spend on their own networks in those areas anyway). They will be competing with NBN Co in those areas where NBN only provides FTTN or and they may be providing a better service which might make it hard for NBN Co and retailers on NBN Co's network to compete on service quality. But just because the new government has directed NBN Co to deploy a second-rate patchwork network to 70% of customers doesn't mean those customers should be prevented from getting something better from another provider, should one be willing to spend on the infrastructure required.

    Of course if the whole NBN was uniformly FTTP this wouldn't be an issue.

    3 1 Reply
    1. treboR
      Reply Icon

      The private networks should totally be allowed to build FTTP any where they want

      Stop here and you have it right.

      0 3 Reply
  4. treboR

    In soviet russia, monopolies reduce price

    1 2 Reply
  5. Denarius
    FAIL

    economics 101, your truckload of FAIL has been despatched.

    There is such a concept as a natural monopoly. Briefly eaving technology aside, having multiple suppliers of the same product or service which requires massive upfront investment and small returns from most consumers is inefficient use of money and resources. The theory of firms as pushed by speculators and party donors freemarketeers assumes low entry and exit costs. This is not true for public infrastructure and a lot else. Adding non-market imperatives such as affordable access for non-urban sites does not affect the costs much. eg running fibre Adelaide - Perth and Darwin is not increased greatly if Alice Springs or Port Hedland get connected along the way. I agree that the last kilometer issue is not simple. In cities and large towns FFTP probably is best, but in scattered rural perhaps a decent wireless would be better. Something affordable and fast, so 4G is not it.

    So NBN has a point, but also so do the firms running up FTTP. Conclusion, For no fault of its own, NBN has all the makings of another worst possible outcome driven by polticians who seem to be remarkably clueless. As someone observed long ago, it is hard to make a man understand something when his job relies on him not understanding it.

    9 0 Reply
  6. David Roberts

    Rural subsidy?

    Just to check.

    If the issue is that a previous Government decided to mandate broadband for all at a price which does not reflect the cost of provision, and decided that rather than subsidise it directly they will allow the Telco to redistribute revenue from "cheap to provide" areas, this might be a workable model.

    Popular with rural areas, not popular with cities, but might avoid the traditional padding of costs where government subsidies are involved.

    So on the face of it the current government removing the monopoly on the revenue generating part seems to scupper the whole idea.

    Is this the intention, to remove an unpopular agreement made by a previous government?

    2 0 Reply
    1. dan1980
      Reply Icon

      Re: Rural subsidy?

      It's an ideological divide - classic left-vs-right. The Labor plan most definitely subsidised things a lot, but that is the very point of a social democracy. The Coalition plan is moving toward a more free-market ideal.

      It's my strong belief that the Coalition would rather the NBN not exist at all but it was already started and, broadly, a popular idea. So, they couldn't simply run on a platform of "axe the NBN". What we are seeing is a government trying to deploy its right-wing ideals while still working within the rough framework of a left-wing service.

      0 0 Reply
  7. poopypants

    Currently wondering which one I'll get first: NBN or Half Life 3.

    1 0 Reply
  8. John Smith 19 Gold badge
    Unhappy

    Who owns this NBN network?

    Is it for profit?

    Is it a regulated monopoly?

    One of the interesting "discoveries" when UK cable companies tried to wire up the UK was the resale value of all that copper cored coax cable, if the company went bust.

    Nothing.

    Recovery costs would not be covered by re-sale of 2nd hand cable.

    If NBN were offering a minimum X mbs everywhere (but higher in high density areas) at a fixed (low price) and a premium for the higher rates that might be a reasonable reason for a state monopoly.

    But I rather think that's not what's being offered is it?

    0 0 Reply
    1. dan1980
      Reply Icon

      Re: Who owns this NBN network?

      Not anymore.

      0 0 Reply

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