Interesting piece in The Oz today on the Terria consortium bidding for the $4.7b in Government largese for the regularly delayed and sent to committee National Broadband Network.
Anyone but Telstra should be the mantra of all fair minded people, and yet they’re asking for more than money, they want a monopoly as well:
“Our proposition to the Government is that no party be allowed to expand the network and operate in competition to the national broadband network,” Terria bid manager Michael Simmons said.
Because of Australia’s size and population this network must be a monopoly and must be structurally separated. If you don’t have a structurally separated monopoly network where access prices are regulated, it will not be viable.
“So you must preclude any alternative broadband network.”
So they want to be another Telstra of sorts, and preclude competition. Mmmmm…..
The positives: structural separation is a must no matter who wins. Access prices regulated by Government authority makes the NBN an essential service, and there’s positives in taking the pricing away from the operator.
In terms of Telstra, the we won’t build it without Government support is rubbish. Telstra have an appalling track record of using its market position and power to bully the competition, even where that competition steps in where Telstra has had no interest. What would happen when Broadband Connect 1 was in place was that a small telco would set up shop in the small country town, offering ADSL where Tesltra had no interest previously. The moment Telstra got wind that the telco was coming to town, often before they launched they would enable ADSL in the exchange and write to every person in the town encouraging them to sign up. When it wasn’t before the fact, it was shortly after, but without fail Telstra would only appear in country towns when a small competitor appeared first. And when I say country towns, I mean seriously small towns 2-3k, one town had less than 1,000 people on the list I remember.
It would be fair to presume that Telstra would cherry pick the most profitable areas of the NBN rollout for itself, making it a harder ask for Terria to make a quid.
And yet, a locked in monopoly creates new issues. What if, in the next 3-5 years, new technology comes along that is better than provided in the NBN. Will not creating a monopoly stifle innovation and slow progression in data speeds, which despite the Government talking about 12mbps, should be looking at 100mbps and beyond?
Protection from Telstra should be looked at, but not at the cost of preventing future players offering better technology that improves the overall good.
