Fairfax gets it wrong - Coalition committed to structural separation

September 4, 2013
Blog

Fairfax media today has published a number of unfair and misleading attacks on the Coalition broadband policy.

The entire basis of Adam Turner’s piece today was wrong.  He claimed that under the Coalition’s model vertically integrated telcos will use their market power to deny retailers access to their networks.

In fact the Coalition has been emphatic that we are absolutely committed to structural separation to create a level playing field for retailers - see pp 10-11 of our policy.

He wrote:

“The bigger concern is that Malcolm Turnbull makes it clear in The Australian today that he's open to the idea of letting competing telcos build different parts of the NBN – allowing them to cherry-pick the profitable suburbs while making it harder for NBN Co to sustain the network in less profitable areas. If you don't live in the inner city, then this plan should make you quite nervous.  Turnbull's plan is exactly the kind of thinking that got us into this mess in the first place. To make matters worse, you can be sure that Telstra will be the telco to cherry-pick the best areas and then hamper efforts by competitors to reach those customers.”

This conflates two points – cherry picking and competitive access. 

The NBN Co monopoly was designed to deny the benefits of facility based competition to the community at large so that the NBN Co could charge high monopoly rents to service its massively overcapitalised investment.

We believe the barriers to the construction of non-NBN wholesale access networks should be removed. But our policy goes on to stipulate that any such competitive networks will be required to make them available to access seekers on non-discriminatory terms and wholesale prices equivalent to the NBN Co's wholesale price caps.

As far as Telstra is concerned, it is precluded from entering into fixed line competition with the NBN. The Coalition is also thoroughly committed to the structural separation of Telstra's retail business from the access network.

That is why Mr Turner’s attacks are so bizarre.  In fact, a number of journalists from the Herald’s IT Pro section were invited to yesterday's launch of the OPENetworks VDSL service in Erskineville, but none actually turned up.

Even still we posted a lengthy transcript of the launch on our website, which went into OPENetworks’ business model and technology choice.

Had someone from Fairfax read that, they would have found that OPENetworks is indeed a wholesale-only open access networks, with 12 retailers – such as Internode – selling products over its network.

Another article by Lucy Battersby claimed:

“Australia's largest cities may receive no broadband upgrade until 2017 under the Coalition's current NBN policy, because households already have access to cable networks installed in the 1990s.”

Much, if not most, of the suburbs in Australia’s major cities are not covered by HFC networks. Our commitment is to ensure that all Australians have access to very fast broadband, that poorly served areas are prioritised and that all will have access to speeds equal to or greater than 25 mbps by 2016.

What was missing in both pieces, both setting out to prove that the Coalition policy will create a digital divide in Australia, was an objective and even-handed analysis of the 2 million households in Australia whose connectivity is so poor they can’t even download a YouTube video.

We make no bones that alleviating this digital divide is the most urgent priority of the Coalition’s broadband policy.

After six years of Labor, nothing has been achieved in this regard - with only 33,000 customers on the NBN fibre, all of the talk, all of the billions have made virtually no impact on Australia's broadband needs.

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