The National Broadband Network (NBN) will not fix telco monopoly in the broadband market, according to Shadow Communications Minister, Malcolm Turnbull.
He made this point at the CommsDay Congress 2010 in Melbourne.
The Government has spruiked the NBN plays a vital role in relieving Telstra’s stranglehold over the wholesale broadband market.
The telco giant’s vertically integrated nature with its wholesale division is tied in with its retail division, and extensive infrastructure, means it can afford to set retail prices lower than other players in the market.
NBNCo recently signed an $11 billion non-binding agreement with Telstra to take on its customers and decommission its copper network.
Turnbull argued if the Government is serious about addressing the problems of vertical intergation, then structural or functional separation is enough.
“[The NBN] is not an end, however to monopoly. There is simply an end to vertical integration,” Turnbull said. “If vertical integration is the problem, the NBN is not the answer unless you believe in taking a sledgehammer to crack a nut.”
NBN will not increase competition and lower prices as the network’s huge capital investment means NBNCo will raise prices to make a return and this will be passed on to consumers, he said.
Turnbull claimed the Government should concentrate on creating a competitive market and through making “fair and predictable rules around” access of wholesale broadband service for ISPs.
Former Treasurer, Peter Costello, took a swipe at the lack of cost-benefit analysis for the NBN.