NBN Co must be split up and sold off to provide a platform for future infrastructure based competition, Australian Competition and Consumer Commission chairman, Rod Sims says.
Speaking at an industry event, Sims said the ACCC supports the Vertigan Panel’s focus on the benefits of infrastructure-based competition.
“The ACCC has been a long-term advocate of efficient infrastructure-based competition as a means of delivering economic efficiency and benefits in the long-term interests of end users,” he said.
Sims said the ACCC also agrees with the Vertigan Panel that the disaggregation of NBN Co presents an opportunity to shape the future market structure.
However, Sims highlighted the very difficult challenge the Government faced in ensuring the roll-out proceeds expeditiously.
In that light, the ACCC understands the Government’s position that it does not intend to go down the disaggregation path at this point in time, he said.
He said NBN Co should therefore put in place arrangements that provided for future separation of NBN Co at an appropriate time.
“Arrangements should include internal systems, accounting and reporting arrangements,” he said.
Sims said the ACCC’s experience was that if this was not done early it would be extremely difficult to do down the track.Read more: ACCC won't factor in NBN Co payments in pricing decision
“While putting in place such arrangements may come at some initial cost, the benefit of doing so when it comes to separating the business in future will be far in excess,” he said.
While acknowledging the Government doesn’t intend to go down the disaggregation path at this point in time, Sims said separation should occur prior to any privatisation of NBN Co.
“After that time, it is highly unlikely that separation will ever occur,” he said.
“NBN Co should be privatised in future. When contemplating this the Government should not limit competition in order to maximise the proceeds from the sale; there is too much at stake for that,” Mr Sims said.Read more: Apple Aussie consumers to get 24-month warranties
“It will be strongly in Australia’s long term interests for, say, three separate entities based on delivery technology to be sold that can provide a platform for future infrastructure based competition.”
“I will always prefer competition between infrastructure providers rather than entrench a monopoly.”