The Federal Government’s commitment to provide uniform wholesale prices on the National Broadband Network (NBN) “defies logic” as it prevents vital competition at the infrastructure level, according to AAPT CEO, Paul Broad.
The ISP has been a longstanding critic of the $36 billion NBN.
NBN Co is all about fostering retail competition but where the focus should be is at the infrastructure level, according to Broad.
“My concern today’s debate about infrastructure is we spent a lot of time in the last few weeks building up legislation to prevent competition at that level,” he said.
The Federal Government has been heavily pushing NBN bill amendments which detail anti-cherry picking provisions. Under the provisions, telcos that build or extend their existing fibre broadband networks that threaten to undercut the NBN would be penalised.
Broad argued this stifled competition at the wholesale level which is vital for the telco industry.
“How do you make a wholesale business work in the NBN world? We struggle to understand how we are going to be able to offer a competitive produce when everybody gets the same wholesale price,” he said. “The concept you can have a flat price for everybody whether they are in the city or country defies all the logic we’ve had for 20 years.”
Broad took aim at NBN Co’s plans to subsidise regional areas with money from metropolitan areas to keep uniform wholesale prices across Australia.
“This will mean inefficient investment in capital,” he said. “We need competition and [this plan] is fundamentally flawed.”
Ultimately NBN Co is just another monopoly and if it wanted to travel down that road the Government-owned company should have just bought Telstra back from private hands, Broad said.
“It probably could have bought it back for $34 billion and sold off all the bits,” he said.
Broad called for the telco industry to “stand up and make noises” in order to prevent the government from further interfering with wholesale competition.
The CommsDay Summit 2011 concludes today.