Turnbull slams ACCC approval of Optus and NBN Co agreement

Malcolm Turnbull has continued to claim the agreement between Optus and NBN Co is anti-competitive

Malcolm Turnbull has slammed the recent ACCC approval of an $800 million agreement with Optus and NBN Co which will see Optus decommission its HFC network and aid the migration of Optus customers to the National Broadband Network (NBN).

Turnbull, shadow minister for communications and broadband, attacked the agreement as anti-competitive and creating a monopoly.

“This is a very black day for the ACCC. This agency [was] established to promote and protect competition. For years, decades, it has railed against Telstra and its quasi-monopoly status in telecommunications and has called, again and again, for more competition,” he said in a statement.

“…nowhere else in the world has a government established a new fixed line monopoly and actually paid billions [of] dollars to the owners of the HFC networks not to provide broadband and voice. It is the very pinnacle of anti-competitive behaviour,” he said.

While the ACCC stated the agreement’s benefits outweigh the detriments, Turnbull asserted the Optus and NBN Co deal should have been blocked by the ACCC.

“The reasons given by the ACCC [for its approval] are confused and contradictory,” he said.

The Coalition has previously put forward suggestions it would develop the NBN by building on existing networks, which could include HFC, instead of developing a fibre-to-the-home network.

“…if you are going to get the crystal ball out, isn’t there just a teensy weensy possibility there of a change of government which will take a very different approach to the NBN?” Turnbull said.

Turnbull also questioned the use of $800 million of taxpayer funds for the agreement, stating Optus has “hit the jackpot”.

“…NBN Co are not lunatics who shell out $800 million for nothing as the ACCC suggest. On the contrary, the HFC is an extremely viable competitor with the NBN Co and because its original capital cost was written off long ago, Optus could upgrade it for a modest cost which would enable it to undercut the NBN on price and provide equivalent services for most customers.

“Recognising this the government and the NBN Co decided to use our taxes to buy out this competition just as they have done with Telstra’s HFC.”

However, independent telco analyst, Paul Budde, previously told Computerworld Australia that the Optus and NBN Co deal makes sense because the NBN is a utility and Optus long ago abandoned upgrades to its HFC network, with subscribers on the network remaining largely unchanged for the past decade.

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3 Comments

Allan G

1

As previously stated following Turnball's nonsensical pronouncements - today's example being :
"Optus could upgrade it for a modest cost which would enable it to undercut the NBN on price and provide equivalent services for most customers" ...
HFC is a old-style coaxial technology that, speaking as a customer of Optus HFC, is a shared infrastructure service that significantly degrades as the customer utilisation load increases.
The technology basis for moving to "Fibre-To-The-Home" (FTTH) will deliver greatly increased capacity immediately, and deliver future-proofing for new technologies going forwards.
The whole point is that competition for such infrastructure services is ridiculous and a waste of resources - it must be a monopoly service, and is therefore best delivered by a government agency.
Competition is only sensible in the provision of services (ie : the delivery of content) at the endpoints of the infrastructure - eg : Movie, News or other Agencies delivering content services, ISPs delivering Internet gateways services, or Mobile Carriers delivering wireless connection services.

ai-u

2

The Keeting government in the name of competition allowed Telstra and Optus to establish dual coax networks. Kerry Stokes in the Boyer Lectures of that time said it was a waste of the nations resources. He was proved right. Neither Telstra or Optus want to continue supporting the network. An Optus executive even said it was a mill-stone. The only advantage is that the ductwork that Telstra put in is able to be used. As for the environmentally ugly overhead cabling of Optus, I trust it will be removed as they disconnect.

dean

3

"and Optus long ago abandoned upgrades to its HFC network"

Please sack this person. Optus only recently upgraded HFC to docsis 3.0

"HFC is a old-style coaxial technology that, speaking as a customer of Optus HFC, is a shared infrastructure service that significantly degrades as the customer utilisation load increases."

GPON is also a shared infrastructure to the home. All the internet is shared - so who really cares. Its like roads. If you share a driveway with your neighbor it doesnt impact your drive to work. Nor does the fact that you share your street with your neighbors. Its the main roads that slow you down. This is the same with the internet.

Seriously, some times i am baffled at the sort of non-sense that gets batted around. Some of it by people who are being paid to say it.

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