We are a GBE that is staffed by experienced Telco professionals most of whom have joined the Company because they want to be part of this nation building project
So we have a publicly owned Telco which has been set up to build the next generation of wireline infrastructure for Australia - a fibre network which we can expect to last at least as long as the copper network.
So the question is, is it a good use of public financing to build the NBN?
I believe the answer to that question is yes. Not only because of the advantages that a national fibre network provides, but because it will simultaneously correct the industry structure problem which has limited the Australian telecom’s landscape for more than a decade.
We probably all agree that separating wholesale and retail networks is a good thing.
Paul Fletcher in his book “Wired Brown Land” wrote what you see up on this slide:
“My fundamental argument is that we need to get the market structure right first if we do that, the right technology will follow. A market structure in which there are multiple providers of retail telephony and broadband services – and they all operate over the same network on equal terms. For that to happen, none of them must own or control the network. Instead, they must buy services from the owner of the network’ and in turn the network owner must be restricted to selling services in the wholesale market rather than the retail market.”
I think Paul absolutely nailed it with these words, arguing for a single national wholesale only provider.
But I understand why people ask the question – “How is it that a Government controlled monopoly can improve competition?”
The wholesale network should be a monopoly, because to build duplicate access networks makes little sense. To build a collection of disparate access networks would be almost as bad.
So who should own the wholesale network? If it is in private hands, you would expect the management of the wholesale company to strive to maximise shareholders returns. We should not expect national interests, including the guarantee of good service to rural and remote communities, to be top of the priority list.
My view after spending 36 years in the telecoms industry, and having observed at close quarters access models all around the world, is that an efficiently run, publicly owned, wholesale Telco whose objectives are to maximise the public interest, is a good solution.
It is much easier to deliver nation-wide eHealth and remote education services on a standardised and ubiquitous network. On the contrary, it’s rather difficult to deliver these services on a patchwork of technologies - it’s been tried in other countries.
The NBN will be a wholesale only network which will provide the underlying broadband capability to all players on equivalent terms. NBN Co is working closely with the ACCC to ensure that the Company is subject to strict regulatory oversight for the long term.
As most players in the Telecoms industry in Australia know, we have a fundamental industry structure problem that is finally being addressed with the NBN. This is a major breakthrough.
In reaching the 7% of Australia’s premises that are not within the fibre footprint, NBN Co will be providing a 12Mb/s service on wireless and satellite that is as close to the fibre product as technology allows. It will be provided at the same wholesale price, no matter where the premise is located.