Labor opposes call to break up NBN

Competition will come from wireless broadband, shadow communications minister says

Shadow communications minister Michelle Rowland says that although the Australian Competition and Consumer Commission’s recent telecommunications market study was “certainly useful in parts”, Labor did not agree with the ACCC’s recommendation that NBN should be prepared for being broken up into separate businesses.

The ACCC recommended that the government begin planning for the disaggregation of NBN into separate, competing businesses.

The government-commissioned Vertigan review of the NBN previously recommended that NBN eventually be split up into separate businesses. Although the federal government said it would not move to immediately break up the company, it indicated there was potential for disaggregation following the completion of the roll out of the National Broadband Network.

The ACCC’s report said it was “imperative” that the government “ensure that measures are in place to enable the NBN to be split into competing networks, to provide a market structure that will facilitate greater infrastructure-based competition”.

“4G and 5G are going to give NBN enough to think about,” Rowland said today in a speech at the CommsDay Summit in Sydney. “My view is that NBN and wireless broadband are the future of infrastructure-based competition for residential broadband in the Australian market. The market should be designed to encourage competition along this dimension.”

The shadow minister said that Labor did not want to see fixed-line networks duplicating each other “because we don’t consider this to be efficient investment,” citing the example of Telstra's and Optus’ rollout of cable broadband.

“We do not want to see uneven competition in inner-city residential basements,” Rowland said. “We are comfortable for NBN to be a ubiquitous fixed line provider because that was always the policy intent.”

Rowland said it was “not a religious argument”. “It is simply born out of what has and what has not worked over the past 25 years and why the NBN was set up in the first place,” she said.

“For particular sectors to flourish and for the long-term interests of end users to be maximised they need more than competition; they need sustainable competition,” Rowland said. “Where market failure exists, government needs to have a coherent view about the price and quality dimensions along which they want competition to occur.”

Taking a “leap of faith” and breaking up NBN into competing fixed-line infrastructure providers would not be fiscally responsible, Rowland said.

 

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