In a speech to be given at Telstra’s annual general meeting today, Mullen said the government could have subsidised the technology industry to extend broadband coverage to regional and rural areas at a fraction of the $50 billion cost of the NBN.
“It is always easier to comment with the benefit of hindsight, but it is my view that over the last 10 years private sector competition between strong players such as Telstra, Optus, TPG and others was always going to build 100MB broadband access and speed to the majority of the population of Australia, in an ongoing competitive landscape and at no cost whatsoever to the taxpayer,” Mullen’s speech, published on the Australian Stock Exchange this morning, reads.
“Governments could then have decided how much subsidy they were willing to provide the industry to extend this coverage to regional and rural areas where private sector economics were unattractive. This would have been at a fraction of the cost of today’s NBN.
“Instead, however, in the NBN we have created a state-owned monopoly that is going to cost the country more than $50 billion.”
He concedes in the speech that: “Telstra too must bear part of the blame for this due to its recalcitrance in helping government at the time (but) whether we like it or not the NBN is here to stay.”
Mullen argues that the NBN has left Australia with some of the highest wholesale broadband prices in the world, saying “(if) this trend continues, over time most resellers of the NBN will withdraw or go broke”.
“The downside of this in turn will be fewer service providers and ultimately higher broadband prices to the consumer.
“Alternatively, a reduction in the wholesale price of the NBN would mean that reselling the NBN would be profitable for RSPs resulting in a dynamic and competitive broadband industry and retail prices would be kept materially lower.”
He says the NBN had been able to “move outside its mandate and sell directly to our customers, but RSPs have to stay within their mandate and cannot sell to the NBN’s own protected market in return, due to regulations which prevent retail providers investing in fixed line infrastructure to provide consumer services”.
“Secondly, the original intent of the NBN was to bring high speed internet at competitive pricing to those without such access.
“It seems a waste of collective resources to be delaying investment in the consumer roll-out to people yet to be connected and instead be focusing investment in the enterprise market where the NBN is duplicating existing high speed fibre for no service or speed advantage.”
He stresses in the speech that he is not blaming the NBN’s executive leadership.
“To the contrary, they are capable and professional people with whom we have a constructive and engaged relationship and whom we respect,” Mullen writes.
“These challenges are not of their making either as they too have to work with the cards they have been dealt and they are doing their very best in difficult circumstances.
“This is not just a NBN or Telstra problem – it is a problem for the whole of Australia to resolve – government, industry and the NBN together.”
– with AAP
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