The ACCC has made a draft decision to reject a proposal by G9, the group of nine Telstra competitors, outlining their own proposed fibre network.
Led by SingTel Optus, their attempt to set out price, technology, management structure and conditions of access to their proposed network has been dealt a serious blow by the ACCC – despite the rosy spin put on the outcome by the competitors themselves.
The ACCC found that the G9 approach was unreasonable and therefore couldn’t be accepted.
While the role of the ACCC ultimately is to address the long-term interests of end-users, there was more in their reasons expressing concern about the interests of access seekers than the long-suffering public.
Even in its self-serving efforts, the G9 is no measure for the system. Grahame Lynch in CommsDay said if an undertaking prepared by access seekers can’t get up, is there any which can under the current regulatory regime.
There was a similar comment in the Sydney Morning Herald by a business analyst, Mark McDonnell “… if none of the obvious parties most likely to build a new broadband network can do such at the prices the ACCC finds acceptable, then it does raise the question of whether an ACCC-led process will ever lead to a new broadband network."
Telstra has said all along that the G9 pricing formula was unreasonable, but that is because it loads all the risk from cost increases onto the consumer – and that is a big risk given that G9 doesn’t know what its costs will be.
There are other even more serious risks to the end-user – the consumers – not even touched on by the ACCC. In fact the ACCC specifically declined to comment on important issues of technology, quality and reliability of service that would affect consumers.
For example, the ACCC didn’t want to comment on what technology would be used, though the G9 approach doesn’t even attempt to introduce new technologies that would provide speeds any greater than available today.
There is no apparent concern about the risks for consumers of having their lines cut over, holus-bolus, to a new untried and untested network operator and manager, or what will happen to payphones or traffic lights for that matter.
There is no assessment of the ability of a complex consortium to operate effectively. This is not to mention whether this group has the technical capability to manage such an important national investment – given Optus in its OPEL guise can’t get a rural wireless network operating even with a $1 billion gift from the taxpayers.
By contrast Telstra has detailed plans in place to deploy a high speed broadband network, the expertise and skilled workforce. Telstra’s pro-competitive model will give all competitors access to the type of bitstream service discussed by the ACCC, giving access seekers control over their quality of service.
And unlike G9, Telstra isn’t asking for a statutory monopoly to prevent competitive infrastructure building.
The G9 may have heaved a collective sigh of relief that their bluff has not been called – but unfortunately for the broadband users of Australia the ACCC merry-go-round of submissions goes on, allowing G9 to resubmit their application to prorogue the process and delay the rollout of Telstra’s broadband plan.
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