Killing the NBN golden goose

Telcos need to stop seeing NBN Co as another version of Telstra. Their negative bickering campaign is just counterproductive.

Over the last few decades the telecom industry has found the Australian Competition and Consumer Commission (ACCC) to be a worthy ally in its efforts to get competition working in this country. One could argue that the regulator has been slow and not particularly entrepreneurial in its activities, but it certainly has done everything within its power to assist the industry. And in return the industry has, in general, been most appreciative of the ACCC.

During that previous period the regulatory body’s powers were limited as it had to operate within the policy framework set up by the previous government – a framework based on self-regulation – and under that scheme Telstra had plenty of opportunities to frustrate the regulatory system. And that is what it did.

This is where the NBN came in. It was the industry – supported as far back as 2002 by the ACCC – which argued for the structural separation of Telstra and for a more comprehensive broadband policy. They have now got what they asked for, and even Telstra came to the party. So the industry is now well set to move forward, and in a far better shape than ever before.

Under the new regulatory framework NBN Co has none of the incentives to frustrate the process in the way that Telstra chose to. On the contrary, it is eager to please the industry as they are its customers; and furthermore NBN Co only represents the national interest; is in impartial as in that it has to treat everybody equal and it does not have the same shareholder pressure as commercial organisations.

A negative bickering campaign

Of course, it will never be nirvana, but that’s business for you. At the moment we have one of the best, if not the best, regulatory framework in the world; yet the industry is now involved in a negative bickering campaign about how much more power the ACCC needs to manage this system. The regulator has indicated it is happy with the arrangements and that it has the power to intervene if things go wrong. And by all accounts it looks as though 95 per cent, if not more, of the regulatory issues have been nailed down.

The only serious problem that I see is one that has been created by the industry members themselves, and that is the increase from 14 to 121 POIs (points of interconnect into the NBN). As I have said before, this can lead to market dominance in the retail market as only a few national retail operators will be able to afford the necessary equipment investments in all of the 121 POIs. Interestingly it was NBN Co who wanted the 14 POIs – and thus limiting investment duplication –  but it was the industry who argued for 121.

I would also argue that the POI issue is many times more important to the industry than the bickering that is taking place at the moment. It is about time the industry stopped splitting hairs and got on with the job. It will be impossible to have every single element of the NBN worked out to the last tiny detail; obviously things will need to be adjusted as the network is rolled out, once the industry has a better understanding of the new environment. The government, the ACCC and NBN Co are all aware of this, so let us address any new issues if and when they arrive.

The other negative outcome of all this bickering is that it can be used as ammunition by those who are against the NBN, and so the industry is in fact undermining its own future.

The industry should stop looking at NBN Co as if it is the Telstra of the old days. There is no reason for that and it only further aggravates the toxic atmosphere that has been such a prominent element of the industry in the past. Let’s get over this, start working together and have some faith and trust in each other to make this happen. What can seriously go wrong with at least 95 per cent of the regulatory and competitive environment in place?

NBN Co’s recently submitted special access undertaking can be the catalyst for the industry to now put their weight behind the project and move forward.

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