In thinking about Telstra’s woes, an issue that always arises is the pricing of line rentals for the copper-pair into peoples’ homes. Telstra claim to not be recovering investment costs on these (despite the fact that investments took place decades ago) and that average pricing is needed to provide rural cross subsidies. Moreover, the copper-pair from the node represents the big bottleneck to competition.
So how about this? T3 becomes a ‘real privatisation.’ The government hands ownership of each household’s copper-pair to the household and they choose who can supply services over it. If they want to give access to someone other than Telstra it is their business. It is also their responsibility to maintain it (no problems there as Telstra’s own maintenance crews are likely an outsourced operation anyway). If the G9 want to build FTTN then they don’t have to negotiate access to these either (removing an important hurdle). And if there is a rural issue, the government can fix it through explicit rather than cross subsidies. Put simply, there would be no line rental issue because the users would own the lines.
This notion is similar to one of giving phone numbers to users that Stephen King, Graeme Woodbridge and I had many years ago (click here for the paper). [Both of my co-authors currently work for the ACCC so my views here do not necessarily reflect theirs]
Moreover, it is a real privatisation. It gives the public assets to the main users rather than those who can pay. Sounds like a vote winner to me.