Communications Day

Today I was quoted in Communications Day: CCC urges rejection of Telstra demands (Page 3)

The Competitive Carriers' Coalition has urged broadband policy makers to switch off from the incumbent’s demands and regulatory dictates in order to accelerate world class broadband infrastructure.

CCC Executive Director David Forman said that if, as recently claimed, broadband is a disgrace, “it is one of Telstra’s making.” He added that “the idea of building a policy response according to the dictates of the incumbent is not what we understand to be the model being pursued in those nations leading the international broadband pack. ”

The CCC endorsed reports yesterday from Allen Consulting and Marsden Jacobs Associates which claim that structural separation is a viable option to encourage competitive, world standard broadband investment in Australia.

Marsden Jacobs Associates senior economist Jasper Mikkelson said “turning to the incumbent is the wrong response and not what has been done in other jurisdictions. It is a wrong response because it is an answer to the wrong question. It is backward-looking in an environment that needs to be forward-looking and pro-competitive. Creating a competitive environment is the only way to improve Australia’s broadband situation.”

Telstra responded stating that structural separation debate had been argued last year and policy makers opted for a version of this which is only finally coming into effect at great cost to Telstra. “Of course they would like to see Telstra tied up in even more red tape, but strangely none of these companies are keen on such schemes themselves... particularly AAPT/Telecom New Zealand,” the Telstra spokesperson said. He added that the real debate Australia should be having is about how to get faster broadband to more people, “this proposal would only make matters worse.”

The Allen Consulting Group report, “Structural Separation, why it is needed and what can be done,” claims that the fully privatised Telstra is likely to ramp-up its sabotage behaviour. “Structural separation can potentially reduce sabotage behaviour, as the incentive for it only occurs when the monopolist is integrated. In an environment of continued Telstra integration, competition in Australian telecommunications may never fully realise its potential.”

Forman added that the current public discourse is the opposite of what we should be talking about. “We are trapped in a dialogue about what favours we should do Telstra to help them invest without risk. We are alone on the world in having so little faith in competition. We are alone in the world in clinging to thinking that had its heyday in the 1960s but now looks as archaic as the Berlin Wall,” Forman said.