I have to admit that the supposed deal between the NBN Co. and Telstra has me confused about the Government’s intentions here.
Let me see if I understand things correctly and please, if anyone has any real details please let me know.
1. One of the big reasons the Government went with the NBN plan was to create competition in telecommunications and broadband which we were surely lacking. It was also an opportunity to rationalise regulation.
2. The government went so far as to insist that any Telstra involvement in the NBN and even wireless spectrum may well be contingent on it ditching its stake in Foxtel — one of the benefits of that being that it would be a potential NBN Co competitor.
3. The agreement proposed yesterday does a U-turn on all of that by saying that Telstra will continue to have a Foxtel stake but now the potential competition that might come from cable will be neutralised as part of the agreement. That is, no more BigPond cable including all of the upgrades that would have given Australia two competing telecommunications networks across a great number of localities.
Here is why I think No.3 is what is occurring:
Telstra will transfer customers from its copper and hybrid fibre coaxial cable networks to the new network in return for further payments from NBNCo.
Telstra will then decommission its copper and cable networks, getting out of the business of wholesale networks to concentrate on providing retail services and mobile and wireless services.
Senator Conroy said this would achieve ”structural separation” by splitting up Telstra’s long domination of the wholesale and retail aspects of the communications sector.
“Structural separation” my foot. It isn’t structural separation if you shut down the upstream entity. That is decommissioning. Separation involves putting those assets in independent hands so they are a source of competition. I don’t relish handing over domination by one firm to domination by a new one.
As I said, I might be missing something here but that is how I read the news. If anyone clarifies, I’ll be happy to update. But at the moment this is truly worrisome for the whole NBN plan and its potential social dividends. That said, if I am right I can’t believe that the ACCC will ever authorise what effectively amounts to a merger between the only two potential competitors in an industry.