[LINK] NBN and competition

[Nick Ross]

Gotta love people who are most scared about the NBN because of monopoly
fears.

How many years will it be before everyone looks back on all these voices of
dissent and regard them like those who complained about the harbour bridge
et al? 20? 10 even?

I can kind of see why economists are freaking out so much but I can't
understand why they so resolutely refuse to listen to the technologists.

Is, do it once, do it right THAT controversial?

N
On May 30, 2012 12:52 AM, "stephen at melbpc.org.au" <stephen at melbpc.org.au>
wrote:

> ACCC in a twist to banish NBN's rivals
>
> By Peter Martin, May 30, 2012. www.smh.com.au/business (snip)
>
>
> The Optus high-speed cable internet network is a national asset.
>
> Comprising 25,000 kilometres of coaxial cable strung across 550,000 poles
> in Sydney, Melbourne and Brisbane, it provided Telstra with its first
> genuine competition, putting its own wires directly into half a million
> homes.
>
> What Optus has now is an asset that costs relatively little to operate
> and can deliver peak download speeds of 100 megabits per second - far
> faster anything on Telstra's copper wires.
>
> Right now it has 496,000 customers. It is within connecting distance of
> another one million, meaning that for very little cost, Optus or a buyer
> of the network could provide a very fast, very cheap internet service to
> as many as 1.4 million households - a service far faster than ADSL.
>
> NBN Co has asked the Australian Competition and Consumer Commission to
> let it pay Optus $800 million to *shut the network down.*
>
> Only a seriously confused regulator would allow it to happen.
>
> The only precedent for the destruction of infrastructure on such a
> massive scale is the $4 billion NBN Co is to pay Telstra to rip out its
> copper network, transfer its customers to the national broadband network
> and remove the internet from the cables it uses to deliver Foxtel.
>
> In no other industry would the ACCC approve such an agreement not to
> compete. In no other industry would it permit a bribe to decommission
> working infrastructure.
>
> This week it published a draft decision approving the Optus deal.
>
> In terms of national assets, the Optus decision is arguably worse than
> the Telstra decision.
>
> Telstra will decommission its copper phone lines street by street as the
> national broadband network cables are switched on. While there will be a
> loss of competition, copper probably isn't able to compete with fibre
> over the long term.
>
> By contrast, the Telstra and Optus coaxial cables are as good as new.
>
> They were strung up in the last half of the 1990s. They are already fast
> and capable of being made faster. They cost almost nothing to maintain.
>
> They are something that should not be destroyed wantonly.
>
> The Telstra coaxial cables won't be. It has only agreed to disconnect the
> internet from them. It could put it back as soon as changed legal or
> political circumstances allowed.
>
> The Optus coaxial cables are scheduled for destruction. The ACCC's
> decision will have physical consequences. It should not be taken lightly.
>
> And yet the ACCC gives every indication its decision could have gone
> either way. It was "finely balanced", according to the chairman, Rod
> Sims, in Monday's statement.
>
> Its decision to approve the agreement was based on weighing
> carefully "clear public benefits" against "a potentially large but less
> clear detriment".
>
> The main "clear benefit" is odd.
>
> The commission says the agreement will "avoid the cost of operating the
> Optus network to provide a service the NBN is also able to provide".
>
> Would we apply it elsewhere? Should Virgin shut down its airline network
> to avoid the cost of operating a service Qantas is also able to provide?
> Should Woolworths shut down its network to avoid the cost of operating a
> service Coles is also able to provide? Of course they shouldn't. We
> normally value competition.
>
> Some will argue that wiring up houses is different. Frontier Economics,
> the consultant used by Optus in its submission to the ACCC, says fixed
> broadband services are a natural monopoly - they shouldn't be provided
> twice.
>
> But the Optus cable network is already in place. It costs next to nothing
> to keep it in place. It is NBN Co which is planning to duplicate it.
> Given its plans and the rate at which it is duplicating infrastructure
> right now, its complaint against "inefficient infrastructure duplication"
> is simply strange.
>
> In truth, it's competition that worries NBN Co, not inefficiency. It is
> paying $800 million to remove a competitor, not out of a public concern
> about inefficiency.
>
> With its last big fixed line competitor out of the way, the only market
> restraint on its prices and quality of service will be wireless internet,
> and it's on to that as well.
>
> The Optus agreement, given a preliminary tick by the ACCC, prevents Optus
> from advertising wireless data services within the area served by its
> existing cables in a way which is "expressly critical of or makes any
> express adverse statement about the performance or functionality of the
> NBN where such a statement is misleading or deceptive or involves the
> making of a false or misleading representation in contravention of the
> Australian consumer law".
>
> The ACCC waved it through because it is essentially meaningless,
> requiring Optus to do no more than obey the law. But it indicates how
> deeply concerned NBN Co is at the prospect of competition, or as it puts
> it "cherry picking". Competition would force it to provide value, and its
> national pricing structure would force it to provide it to all
> Australians. Its $36 billion cost base won't allow it. That's why it
> needs to destroy perfectly good working infrastructure. It's why I think
> the ACCC needs to think again.
>
>
> Read more: http://www.smh.com.au/business/accc-in-a-twist-to-banish-
> networks-rivals-20120529-1zhen.html#ixzz1wGky5g7n
>
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