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Politics Analysis

Concerns about NBN 'overuse' highlight Coalition Government's failings

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The Abbott, Turnbull and Morrison governments have all failed to implement a suitable NBN (image by Dan Jensen)

Many long-term issues plaguing the NBN could've been avoided if it was an all-fibre network, writes Paul Budde

RECENTLY, IT was reported that a new Australian Competition and Consumer Commission (ACCC) Commissioner, Anna Brakey, said:

We’ve got an opportunity to have a look at the regulatory framework and to make sure, that we efficiently use the NBN. If we set prices too low, there would be overuse of the NBN. And as a result, that would require more investment that just would not be efficient.

 

It would not be valued by people because we priced it too low in the first place. But if we set the price too high, there will be underuse of the asset and potentially bypass.

 

So, without a doubt, I think, getting the NBN regulatory framework, giving that attention and coming up with a new [special access undertaking] or revised SAU, is by far my biggest priority for this year.

It's astonishing to hear from the ACCC that they think that the "NBN could be overused" and that "customers would not value it anymore". The ACCC is mandated to act on behalf of the consumers, not the NBN company. The fact that she is in favour of protecting the NBN in the knowledge of all the inefficiencies that have gone into this project over the last 15 years is simply beyond comprehension.

For decades, we have talked about the NBN in terms of "nation-building", a "national asset", "critical infrastructure for the digital economy" and so on. How might we overuse that?

On the efficiency side, an all-fibre NBN – as originally proposed – can handle all that traffic very effectively and there are hardly any costs involved to deliver kilobytes or terabytes.

So, why limit that? Volume is not an issue for a properly functioning NBN. 

And what does Ms Brakey mean by overuse? More working and studying from home, more telehealth, more smart energy, and smart city usage, more entertainment?

Ms Brakey’s comment sends out the wrong signals. If the billions of investment (and counting) would have been established an efficient and effective NBN in the first place, there wouldn't be the problems that she envisages.

Yes, more investment is now required to fix the inefficiencies the NBN faces, but that isn't the fault of the consumers. It would be wrong to make consumers pay to recoup that money by limiting the use of the NBN. It simply does not make sense.

For too long, the ACCC has let NBN Co off the hook and allowed them to use its punitive wholesale pricing model that is actively limiting retail service providers (RSPs) and their users from accessing the full benefits of the NBN.

We thought that the ACCC would finally address these issues in favour of the consumers, but Ms Blakey’s comment points in the opposite direction and seems to favour such a punitive pricing mechanism.

If the new Commissioner is so worried about the NBN Co, what about the RSPs? They have been arguing for better ACCC oversight of the NBN for a decade. Why isn't the ACCC prioritising them? The NBN’s monopolistic position allows them to squeeze the margins of the RSPs to recoup their own inefficiencies.

A cobbled-together multi mix technology is not the most efficient broadband infrastructure. NBN Co is rectifying this by moving further towards an all-fibre network. However, it would be wrong to punish consumers for those inefficiencies caused by partisan, politically-based decisions.

Furthermore, limiting the use of the NBN is not a good strategy for building the critical social and economic digital infrastructure for Australia.

Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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