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The privatisation of the NBN

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Cartoon by Mark David / @MDavidCartoons

It might come as a surprise to many but there is no national plan regarding the future of the NBN.

Last week, TelSoc organised a panel discussion about the privatisation of the NBN, as is foreshadowed in the NBN legislation of 2009.

The presenters were Professor Peter Gerrand, consultant and ex-Telstra executive Dr Jim Holmes, former chairman of the ACCC Graeme Samuel and executive general manager of the ACCC Infrastructure Regulation division Michael Cosgrave.

The following options were discussed:

  • Integrating NBN and InfraCo (Peter Gerrand)
    This could involve the potential integration of NBN and Telstra’s InfraCo, in either government or private ownership.
  • Government retaining ownership (Dr Jim Holmes) 
    In this option, the NBN is retained as a government business enterprise.
  • NBN sold as an entity (Graeme Samuel) 
    This should include a legislated process comprising a declaration that the NBN is built and operational; a Productivity Commission inquiry; Parliamentary Joint Committee consideration; and Parliamentary approval. 
  • NBN disaggregated by technologies and each sold separately (Michael Cosgrave) 
    As recommended by the 2014 Vertigan Report, in this option FTTx, HFC, fixed wireless and satellite could be sold and would compete with each other. 

The options remain options as discussed — there were no firm outcomes following the discussions. Since there is no national plan regarding the NBN's future, the aim of the conference was to kick off a much-needed discussion of the future of telecoms in Australia.

All speakers agreed that a national policy is what is needed before the Government launches into the privatisation of the NBN. This should clearly state the role of telecoms in the national interest especially in relation to our society, economy and national security.

The very reason why we are in the current position whereby the Government had to intervene in the telecoms market in the early 2000s and why we have this version of the NBN, is because of the failed privatisation of Telstra in 2006.

Despite many industry calls at the time, the Howard Government failed to place conditions on Telstra in relation to the provision of broadband in regional and rural areas, and it failed to structurally separate Telstra. This made it nearly impossible for competitors of the giant private monopoly. Prime Minister Howard was only interested in maximising profits and had little or no regard for the important long-term social and economic role of telecommunications in nation-building.

Any attempts by the Howard Government to make Telstra take the national interest into account failed. These even led to Telstra suing the Government at one stage.

Without proper conditions to safeguard competition and the development of a national broadband network, the government had to intervene and as a consequence, the NBN was born. With a lack of bipartisan support, the NBN has been a political football for more than a decade and has delivered a second rate network. It has also created a new monopoly that again is undermining competition.

All of this should be more than enough to start a proper discussion, this time around, on the future of telecoms in this country and compel the politicians to agree on a bipartisan outcome.

All of the above panel members indicated that privatisation in the current NBN environment is not ideal and not in the national interest. Without a policy and a plan, the situation is far too uncertain at the moment.

Key issues are exactly the same as they were during the privatisation process of Telstra and the development of the NBN.

We need a long term viable competitive market environment and we need a separate plan and structure to safeguard a top-quality network in regional and rural Australia.

Furthermore, we need to make a long-term expert assessment of the technologies included. taking into account what the market will most likely look like in five and ten years’ time. This most certainly will include an increasingly more important role for full-fibre networks, the development of 5G, 6G, fixed wireless broadband and IoT.

In a bipartisan strategic plan, all of these technologies need to be looked at in a holistic way and not in isolation.

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

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