TECHNOLOGY SPECTATOR: Optus gets its NBN goody bag

Technology Spectator
 
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ACCC green lights Optus' $800 million NBN deal

The NBN regulatory puzzle is slowly but surely falling into place, with the Australian Competition and Consumer Commission set to approve Optus's $800 million deal with NBN Co to shut down its cable network and shift customers to the national broadband network.

According to the regulator, the decision went down to the wire but it was satisfied that the public benefits of the deal outweighed "any public detriment likely to result from the arrangements.”

"A wide range of arguments were put to the ACCC by Optus and NBN Co, but in essence our decision was based on weighing carefully two clear public benefits arising from the HFC Agreement against a potentially large but less clear detriment,” ACCC chairman Rod Sims said.

Despite the ACCC's bluster, this deal was always on the cards and NBN Co will certainly appreciate adding the 400,000 subscribers from the Optus network to the NBN. It's also a win for Optus because it frees up the telco to invest its cash into other areas, areas which will be critical in the looming battle in the mobile segment.

As the ACCC rightfully points out, Optus was always going to struggle to extend its HFC footprint and the telco was unlikely to invest more money to keep subscribers on the network once the NBN is up and running.

Honours even in the SKA telescope race

The $1.9 billion race to host the world's largest radio telescope, the Square Kilometre Array, has ended in a tie, with the array to split between South Africa and Australia-New Zealand.

Australia will now be home to the low frequency component of the initiative with 60 dishes, which will work in conjunction with the phased arrayed feeds of CSIRO's Australian Square Kilometre Array Pathfinder (ASKAP), to be built in Western Australia.

The area, one of the few places unscathed by FM radio, provides the perfect radio-quiet conditions for ASKAP and for the SKA. The Commonwealth and Western Australian governments have jointly invested more than $400 million in research infrastructure for ASKAP and the Murchison Radio astronomy Observatory, which will be fully operational in 2013.

Meanwhile, South Africa's Karoo desert will host the majority of the conventional high frequency array, which will be combined with the MeerKAT array.

The outcome will be hailed as a win for everyone after a particularly fierce bidding process and will allow the government to save face, given that it was reportedly close to missing the party altogether, with the SKA Site Advisory Committee was more disposed towards the South African bid.

Speculation that the Australia-New Zealand bid was hampered by the spectre of higher construction costs have been somewhat vindicated by the statements by Federal Science Minister Chris Evans, who has told The Australian Financial Review that the high costs of labour was a major issue.

The project was originally meant to be based in a single area but Evans is evidently happy to have won at least some of the telescope.

IT price inquiry; Taxing Google

The federal government has decided to wield the stick on two fronts as far as the likes of Google, Apple, Microsoft and Adobe are concerned, with the inquiry into price gouging beginning to take shape and more talk around the tightening the tax noose on their local operation.

Australians tired of being taken for a ride on prices will have their say now that the parliamentary inquiry, flagged in April, is finally underway. The lower house standing committee will be led by Labor MP Nick Champion, who will take up the torch lit by Labor backbencher Ed Husic.

The committee will report on what price differences exist and why and determine what actions "might be taken to help address any differences that operate to the disadvantage to Australian consumers”.

In his referral to the committee, communications minister Stephen Conroy noted that some products are up to 80 per cent more expensive in Australia compared to in the US. The Productivity Commission is aware of the long-standing practice by which some international suppliers set different regional prices.

While Husic has been waging the war for almost a year he did flag to Technology Spectator earlier this month that Champion was always in the frame in relation to the inquiry. According to Husic, Champion is a keen follower of tech issues, so the South Australian Labor MP should feel right at home. Launching this inquiry was always going to be the easy part of the equation. Finding a solution for consumers will prove to be far more difficult. Submissions are open until July 6, 2012.

With regards to taxing the tech giants, the assistant treasurer, David Bradbury, has reportedly said that transfer pricing legislation introduced to the parliament would ''ensure that multinational companies pay their fair share of tax'' and would address multinational companies shifting profits within their companies to avoid paying tax. This sort of sabre rattling obvious makes for good headlines but the consensus among analysts and tax experts is that the government might be better served by not taking an antagonistic stance against the companies. A better tact might be to encourage them to do more development work in Australia and also providing local companies with more incentives.

Catch of the Day's growing stable

The Catch of the Day stable is evidently not fussed by all the doom and gloom in the local retail sector, with the eCommerce company about to launch a new online shopping site targeted at mothers with young children in July. The site, Mumgo, will be the fifth addition to the Catch of the Day roster and will sit along Scoopon, Grocery Run and its latest acquisition Vimofo.

Meanwhile, the brains behind the outfit, brothers Gabby and Hezi Leibovich, have made it to the annual BRW Rich List with a fortune of $240 million. The Leibovichs have already managed to score an $80 million investment from James Packer's Ellerston Capital last year in a deal which valued the company at $200 million. At this rate it's looking like money well spent by Packer.

Speaking of Ellerston Capital, the Packer outfit has picked up a 5.4 per cent stake in biotech firm Acrux. The Melbourne-based drug delivery company, is developing and commercialising products involving the delivery of pharmaceuticals via the skin. Ellerston Capital joins AMP and Paradice Investment Management as a substantial shareholder in the biotech company.