Aus competition head applauds broadband plan

Rose Major

Australia’s head competition honcho has applauded the government’s decision to build the country’s proposed national broadband network as a public-private initiative, calling it “the most momentous policy initiative in the Australian telecommunications sector since the introduction of full competition over a decade ago”.

Graeme Samuel, chairman of the Australian Competition and Consumer Commission, which has been locked in battles with incumbent telco Telstra for years, said that the network would “spark a new wave of infrastructure investment, technological change and product innovation in the [telecommunications] sector”.

Talking to a Canberra conference, Samuel went on: "Covering 90 per cent of households, the Australian fibre-to-the-premises network will easily eclipse what is currently the world's most broadly available network in South Korea, which has a penetration rate of 45 per cent. The next three largest, in terms of penetration are Hong Kong and Japan, both with close to 30 per cent and Taiwan with 16 per cent."

Calling the current vertical integration of Telstra whereby the telco both wholesales and retails capacity “one of the most substantive regulatory issues…[which has] significantly constrained competition”, Samuel said that new network would benefit from true open access.

"Structural separation will mean the NBN operator has a clear incentive to treat access seekers on an equivalent basis," Mr Samuel said. "Therefore, the government's announcement provides an opportunity to deal head-on with the difficulties arising from the vertical integration of the current incumbent.

"In the longer term, the structure and design of the NBN and the regulatory regime that accompanies it will likely determine the prospects of competition for other services like fixed line networks."