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NBN A Monopoly Waiting To Happen Warns Rudd Boffin As Telstra Roadshow Revs Up

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Consumer interests are also neglected by the new telco monopoly, and will result in “higher prices, less choice and innovation,” the ACC have also been warned.

This startling new attack on the $36bn national broadband plan was voiced by former University of Melbourne Professor Gans, a leading advisor to former PM Rudd, in a report co-authored by MIT professor, Jerry Hausman.

The report, submitted to ACCC this week relates to the consumer and competition body’s ongoing investigation into Telstra’s proposed structural separation and ‘migration’ plan.

Key elements of the NBN Co, the company charged with fibre opticĀ roll-out, will herald a “return to monopoly network provision in telecommunications in Australia,” namely former state owned Telstra, but by a different government agency.

The main point irking the professors is the acute lack of competition the NBN Co regime would usher in, disallowing main player Optus and Telstra to compete in fixed line services nor will they promoteĀ  wireless broadband solutions against NBN services.

“The stated goal of this provision is to make NBN Co. (a government–owned entity operating as a business) the monopoly wholesale provider of fixed line services in Australia; at least with respect to existing incumbents in that industry” the report dated September 13 states.

“Specifically, they are designed to prevent the two largest incumbents fromcompeting upstream against NBN Co in the future.”

“Our conclusion is that the Telstra Structural Separation Undertaking and Draft Migration Plan is likely to be massively anti—competitive. While it may suit the needs of the Government,Telstra,and others,it will lead to significant consumer harm lasting for 20 years or more.”

“No one at the bargaining table appears to have represented consumer interests,” the submission also warns.

“While we both reside outside of Australia,we were motivated to provide a submission because of our long history and experience of working on telecommunications and competition policy issues there,” say the duo, who have called on the ACCC to “step in” and protect interests, against a turn to monopoly network provision in Australia.

The appropriate solutions would be (for Telstra) to divest itself of its hybrid fibre (HFC) network to an “independent firm, perhaps Foxtel” and for that firm to supply broadband and phone services “independently. “

This latest warnings come as Telstra begins its own rollout of the NBN roadshow – its bid to convince shareholders to give the green light to approve the $11 billion deal with the broadband company it is looking to get signed off.

In what the Australian Financial Review called “the biggest series of retail shareholder briefings since the 2006 T3 privatisation” David Thodey’s telco is on a mission to get the lucrative deal “worth billions” the go ahead.