The Coalition government will consider opening the NBN network to mobile telcos for cheaper backhaul, said Liberal MP Paul Fletcher, the parliamentary secretary to the minister for communications.
“It is very clear that the fixed connection running from the base station back into the network ... is critical to the economics of the base station, and therefore the cost to the respective operators of backhaul is a key issue,” Fletcher said at the launch of a McKell Insititute report commissioned by Vodafone Hutchison Australia.
“Under the previous government, we saw NBN Co had little appetite to sell backhaul to mobile operators. We take a different view, and if NBN Co can make the economics work, we will certainly not be standing in their way.”
Vodafone CEO Bill Morrow renewed a call to examine the issue and said the ongoing 60-day review of NBN Co is an opportunity to do so. He urged the government to use the NBN as a mechanism to enhance mobile competition by lowering backhaul costs that mobile competitors Vodafone and Optus pay to Telstra to connect their base stations.
“Put simply, you need fixed-line infrastructure to carry the voice and data traffic from the mobile network to the exchange and to the rest of the world,” Morrow said.
“However, the economics of building duplicate fixed and mobile infrastructure don’t stack up, leaving consumers in many areas with no choice. We need greater competition to create the market that delivers more coverage, better services and choice to consumers.”
The McKell Institute report recommended a second look at the NBN that would place more emphasis on mobile services. While the report was commissioned by Vodafone, the McKell Institute describes itself as an independent, not-for-profit public policy group.
“This paper makes the case that the NBN, far from becoming redundant due to the explosion in mobile internet access, is in fact crucial to delivering better mobile services to both regional and urban areas without any significant increases in cost,” according to the foreword by the Institute’s chair, John Watkins, and executive director, Peter Bentley.
The NBN lacks a strategy for enhancing mobile services, even though the mobile landscape has changed significantly since the NBN project commenced in 2009, the report said.
“In 2013, it is time for Australia to refocus its attention on how mobile telecommunications and broadband are converging, and what policy settings are needed to drive competition, choice and coverage for mobile telecommunications across Australia.
“It’s a plausible working hypothesis that the single best way to improve the economic development of regional areas, and possibly Australian productivity overall, would be to provide affordable mobile broadband.
"The importance of delivering both fixed and mobile broadband has been identified by a number of recent studies, but it has not yet been embraced by government or the NBN Co as the top priority it deserves to be.”
Fletcher said he agreed with the “central thesis” of the report. “To think about broadband policy and the taxpayer-funded NBN in isolation from mobile networks and services is to risk real public policy opportunities.”
One way to enhance mobile coverage in remote areas might be to allow mobile operators to use wireless towers built for the NBN fixed wireless network for their own services, he said.
Morrow framed the proposals in the report as modest.
“This report doesn’t call for a radical overhaul of the NBN; rather just a shift in thinking,” he said. “The NBN will open the door to so many new opportunities with the right focus.”
The government has commissioned a 60-day review of NBN Co, which will include analysis of the progress and cost of the NBN rollout and NBN Co’s financial and operational status. The review is due for submission to the government for consideration by December 2.
The government plans to detail its new plan in a statement of expectations that will be released after the review is completed. The Coalition issued an interim statement of expectations last month to provide construction and operating guidance to the NBN Co during the audit.
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