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Extended public hearings should focus on local initiatives for NBN

The Senate Select Committee on the NBN announced in the media yesterday that public hearings will be extended until 30 March to focus on the part of the draft NBN legislation that will allow NBN Co to operate as a retailer.

Details of the hearings are yet to be released but I have contacted the committee for more information and will report back shortly.

In the meantime, two pressing questions have arisen in the NBN debate: 1) Should Telstra's wholesale and retail businesses be separated? and 2) Should NBN Co be allowed to operate its own wholesale and retail business?

If NBN Co is allowed to operate in the retail sector, we may have witnessed a costly exercise in re-inventing the wheel.

Previous governments were fond of using Telstra as a big policy lever. If political leverage was needed, simply pull the big lever and Telstra did the government's bidding. T3 changed that forever, although the government's 17% share in the telco meant that the policy lever was still within reach - until Sol Trujillo took away the handle, that is.

So is the government's insistence on NBN Co's retail operations simply a way to re-establish the old policy lever?

Maybe. But there might also be some logic to NBN Co entering the retail market. For example, in areas where there is insufficient competition or limited retail services, NBN Co might be able to break long-established pockets of poor service. Palmerston via Gungahlin is a case in point, with NBN Co or TransACT expected to break the service deadlock with the support of Senator Kate Lundy.

On the other hand, we might just be recreating the Australian way of doing communications policy by sticking to the single national solution.

The Coalition are not happy about the proposed break-up of Telstra and there is some merit in extending the public hearings on NBN Co's proposed retail operations.

But separating these two issues is simply wrong.

If Telstra is forced to separate, then NBN Co cannot operate a retail arm. Otherwise, we return to telecommunications business as usual - the reason Australia became a broadband laggard in the first place.

But the public hearings and the focus on NBN Co's proposed retail operations provide an opportunity for local operators to be involved in the NBN. If NBN Co is given the go-ahead for retail operations, there will be little scope for local operators to deliver retail or last-mile services.

Instead of allowing NBN Co to operate in the retail market to fix existing pockets of poor service (like Palmerston via Gungahlin), the government should call for tenders from the private sector and enable community and municipal proposals to be considered.

The public hearings proposed by the Senate Select Committee on the NBN may be the last opportunity for the local element of the network to be developed. But this approach flies in the face of the federal government's desire to re-attach their handle to the old school policy lever.

In short, if NBN Co is given the go-ahead to provide retail services, then we can expect to have a brand-new, $43 billion, re-invented wheel.