[LINK] Conroy dismisses NBN anti-competitive report

Kim Holburn kim at holburn.net
Fri Dec 9 09:21:08 AEDT 2011


http://www.abc.net.au/news/2011-12-08/conroy-dismisses-nbn-anti-competitive-report/3721386

> Communications Minister Stephen Conroy has dismissed a report that has found the National Broadband Network (NBN) could be anti-competitive.
> 
> The Productivity Commission has warned that because the non-commercial benefits which may be generated by the NBN are yet to be determined, the company could be in breach of the principle of competitive neutrality.
> 
> Some of the non-commercial benefits flagged are in areas including health and education.
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> It follows complainants alleging NBN Co has gained a market advantage because it is government-owned.
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> Senator Conroy has rejected that, saying the Government decided to build the NBN because the private sector could not.
> 
> He said NBN Co was set to operate eventually as a commercial reality, but its purpose was to not expect to earn a rate of return comparable with that in the private sector.
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> "To earn the commercial rates of return that the report is recommending, higher prices or lesser services would be necessary in rural and regional Australia," he said.
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> "The alternative of funding of rural subsidies from the budget would create permanent uncertainty."
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> Senator Conroy said the Government would not be adopting the related recommendations of the commission's report.
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> "As the Government has said many times, it is doubtful these benefits, which are so self-evident and pervasive, could be meaningfully quantified, and even if they could, whether there would be any particular merit in doing so," he said.
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> Under attack
> 
> Opposition communications spokesman Malcolm Turnbull has pounced on the report, arguing it shows the NBN is anti-competitive and uncommercial.
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> Mr Turnbull also said the report found the community service obligations on the NBN did not justify the huge investment and sub-commercial returns.
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> "The Productivity Commission concluded any community service obligation costs carried by the NBN Co should be transparent and quantified so that their true impact on the corporate plan and commercial returns can be assessed," Mr Turnbull said.
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> The Business Council of Australia (BCA) says it is not too late for the Government to undertake a cost-benefit analysis of the $35.9 billion network.
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> CEO Jennifer Westacott said the Productivity Commission found that NBN Co's target rate of return of 7 per cent was below a commercial rate of return as required of all government businesses under competitive neutrality policy.
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> "The commission has recommended that the Government assess the non-commercial benefits of the NBN investment to justify the network's rollout at a lower than a commercial rate of return," Ms Westacott said in a statement.
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> "It is not too late for the Government to undertake a cost-benefit analysis to demonstrate whether this investment and its associated impacts on competition are the best way forward for developing the communications sector and lifting productivity growth," she said.
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> But telecommunications analyst Paul Budde says the Commission has got it wrong, because it is approaching the NBN as a telecommunications network, instead of a piece of national infrastructure.
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> "Most of the problems that we are facing now in economic, financial and ecological terms do require national infrastructure on the level on an NBN," he said.
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> "Why is the NBN different from electricity or water or roads?"
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> However Mr Budde said private cable-laying companies who complained to the Productivity Commission did have a legitimate complaint.
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> He said the Government pushed them out of new housing developments, even though it promised to cooperate with them in the first place.
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> "From a moral point of view I think both the Government and NBN Co did the wrong thing," he said.
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> "They should have honoured the promises that were made in the beginning where there was a cooperative environment between the two.
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> "Basically NBN Co bulldozed over them."
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> The Government established NBN Co to build a fibre optic cable network to 93 per cent of homes, schools and business with high-speed broadband across Australia by 2021.
> 
> The remaining 7 per cent would be connected by fixed wireless and satellite technology.


-- 
Kim Holburn
IT Network & Security Consultant
T: +61 2 61402408  M: +61 404072753
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