NBN Co a monopoly? Who knew

Rodney Gedda

Rodney Gedda is the former deputy editor of CIO and former editor of Techworld.

A chorus of complaints has started to surface from established telcos that the NBN Co will be in a monopoly position for residential (and some business) fixed line access. Hang on a minute, wasn’t that known from the start?

At TechWorld we’ve discussed the outcome of a wholesale-only National Broadband Network for some time.

The NBN is essentially what Telstra Wholesale would have been if it was split from its retail business!

  • Telstra was government-owned, NBN Co is government-owned
  • Telstra controls the last-mile, NBN Co will control the last mile
  • Retailers must deal with Telstra Wholesale, Retailers must deal with NBN Co
  • Detect a pattern?

What’s laughable is any suggestion that Telstra is worried about a NBN Co “monopoly”.

The goal of the NBN is sound, but the implementation carries a lot of risk

Telstra already has a fixed-line monopoly and the work it has done building out it mobile network in recent years also gives it a compelling offering for regional communications.

Telstra is more than capable of competing on a level playing field. It just needs to learn how to deal with it.

I don’t think the NBN is a bad idea, but as I’ve said all along there’s not much point in repeating the mistakes of the past, even if there are obvious benefits to faster, more accessible broadband.

The goal of the NBN is sound, but the implementation carries a lot of risk.

The obvious risk being too much capital expenditure and too high operating costs as a result of the NBN Co bureaucracy.

A less apparent risk is whether a project of this magnitude will succeed at all within a reasonable period of the time-budget constraints.

The NBN Co and retailers

Another suggestion is that NBN (or customers) itself might take on the form of a communication services retailer.

I think that’s unlikely as most companies that would go to the trouble of getting a carrier’s licence tend to have established relationships with telcos.

Besides, if the NBN is truly a wholesale-only network then all existing retailers will have access to the same service at the same price, right?

Perhaps a better outcome for “competition” as a whole would have been to have Telstra and NBN Co last mile networks side-by-side.

This may have been cost-prohibitive, but at least it would have given consumers the choice of low-cost DSL services instead of pricey fibre-to-the-home.

It will be interesting to see how much competition there is among the NBN Co RSPs.

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Tags: broadband, NBN, Telstra

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