[AusNOG] NBN Legislation

[Bevan Slattery]

1) My take on it is that ubiquitous access is the primary concern of the NBN, not international carriage.

NBN's  initial goal was to build a FttN network for a total of $8.7B with Government contribution of $4.7B.  The Minister explained there was a robust fully costed model for that (which was never presented).  Then NBN 2.0 was to solve the last mile access problem and not to compete or overbuild existing infrastructure.  It was about last mile, not backhaul or alike.  It could also be built with or without Telstra and keeping the existing infrastructure in place.  They don't seem to be having much luck keeping promises.  Also, Sen Conroy foreshadowed at a speech that the Government were looking to invest up to $250m in a submarine cable.  Haven't heard anything since then though.

2) PMG (Post Master General) had a large hand in delivering the first submarine cables out of Australia. PMG was a government entity.

Completely wrong.  From recollection the first international submarine cable to hit Australia's shores (which interconnected the Overland Telegraph Line) was by a privately-owned "innovator" company called British Australian Telegraph company.  This was a link between Singapore and to Port Darwin.  (predecessor of the UK Cable and Wireless).  In fact they also installed a second cable too which was the Jakarta (Batavia) to Broome link in 1901.  The Eastern Extension Company built the submarine cables from Perth-Freemantle to Durban. 

The biggest subsea cable to be delivered in Australia's formative years was the "All Red Line" by the Pacific Cable Group/Committee which was made up of numerous countries in the British Empire with the States of NSW, Victoria and Queensland each paying 1/9th of the cost.  The PMG has no involvement in this.  (For peoples interest the original landing hut is still standing in Cable Street at Southport - actually I think it was the second hut, as the first was washed away in a storm a few years after launch).  Ironically it was formed because the Eastern Telegraph Company had a monopoly on submarine assets throughout the world and was not interested in delivering a new system which would compete.  So in this (and the only instance in Australia's history that I am aware of), did any form of Australian Government have direct ownership in an international submarine cable system.  It's quite ironical that it was the Government being the innovator here.

You should note that OTC was formed after WWII through the acquisition of the international submarine cable assets from private companies (Cable and Wireless).  I have no recollection of the PMG *ever* owning an international submarine cable system.  And for those of us that remembers the days of OTC and Telecom Australia it should serve as a lesson of absolute market failure through the creation and constant reinforcement of a Government owned monopoly.  That's another story.

3) There are innovators in business - I'm arguing that generally, telcos/NSPs have not generally been innovators.

Sorry Vak - you're not arguing.  You are merely making an uninformed and ridiculous statement.

4) Seeking access equality is not a "Communist manifesto"

Seeking access equality?  Sorry they are seeking an access monopoly.  NBN Co. is removing all large scale serious threats to it's [flawed] business plan by incentivising Telstra to remove it's copper and HFC networks.  Then for the remainder of the networks it is looking to strand those investments by making it commercially impractical, unfeasible or dare I say impossible for the them to continue to offer services in the manner an efficient market allows (and in the manner in which private industry has invested).  So I would ask this Vak:

"If NBN Co. is building to 93% of Australian premises with their fibre product in which the market via RSP's will have all have equal access to NBN Co.s restricted product set, then why is there any requirement for every other carrier to provide a service that either (a) do not want to (b) their customer may not want (c) is not economic feasible".  If there are no "innovators" as you claim then why is the Government forcing people to offer a product that they are seeking to provide?  Why are they making carriers submit "conformist" SAU's for even the smallest build or the smallest upgrade?  SAU's are an instrument for someone to get regulatory relief from operating a monopoly - how is that even remotely relevant or appropriate for an organisation simply looking to provide a service they are prepared to sell and the customer is prepared to buy?

It's crowding out economically through the use of a centralised "Government knows best" approach which is designed  to make the business case for innovative capitalists vanish.  There is no requirement for the Government to be requiring *competitors* to NBN Co. to *comply* with NBN Co. type standards.  Why not let the consumer decide which service best suits their needs? That's what happens in an efficient (and dare I say capitalist) market.  So saying it's a Communist manifesto is probably a little harsh.  But it is either an "abuse of market power by the shareholder of the new monopoly to prop up a deficient business case" or a step towards socialism.  I have a fair idea which it is.

[b]