Budde believes Senator Conroy got it wrong in dictating the technological terms of the network while not clearly defining how it would be regulated. In order to keep pace with the rest of the world, Australia should set its telco infrastructure goals in line with the top OECD countries, he argued.
“It’s so ridiculous for a government to come up with technology solutions when they have absolutely no idea what they are talking about. The current infrastructure policies are already outdated. 12Mbps [minimum speed at 98 percent coverage] might have been a great thing when Conroy dreamt it up in 2005-06, but now the rest of the world is talking about 20-50Mbps.”
The worst case scenario is we get another Telstra monopoly, The best case is structural separation.
Leaving it up to the industry to propose how the network owner will operate has essentially boiled down to an argument over whether Telstra should or shouldn’t be structurally separated, as the incumbent is the clear favourite to win the bid.
However, the atmosphere of regulatory uncertainty created by the government means that by the time the tenders are in at year’s end, and the bid is awarded, Budde predicts 2009 will most likely be spent sorting out legislation or in the courts by Telstra fighting separation.
“By March next year there will be some sort of outcome and that will definitely include regulations or legislation. On one side we’ll get disputes, guaranteed disputes, and [on the other side] I’ve never seen regulation or legislation done overnight so the rest of 2009 will be spent sorting that out. Nothing is going to happen in 2009 for the NBN, 2010 at the earliest.
“There’s no use going though this tendering process without a regulatory framework. Even if we do get it there will be endless legal issues in March. The worst case scenario is we get another Telstra monopoly, the second worst case scenario is we have ongoing legal battles through 2010, 2011.
"The best case is structural separation. In one way or another the government will have to make a decision on structural separation and make a strong position, so why not do it early? We’ve already wasted 3 or 4 years, do we want to waste another?”