Vertigan inquiry recommends NBN split
The last of the three reports by the federal government’s Vertigan inquiry was released on 1 October. It contains sweeping recommendations, including the break-up of NBN Co through splitting off its fixed wireless, satellite, transit and, possibly, HFC assets.
Communications Minister, Malcolm Turnbull, has already moved to all but rule out such a split. But other recommendations of the report are likely to get a more sympathetic hearing.
These include:
Tightening of the “loop hole” that has allowed TPG to roll-out fibre in competition with NBN Co without having to provide competitors access to its network
- Removal of NBN Co’s fibre monopoly.
- An end to provision by NBN Co of fibre in new estates at sub-commercial rates.
- Transfer of the ACCC’s telecoms regulatory powers to a new networks regulator.
The break-up recommendation reflects the Vertigan panel’s view that governments should not be in the business of determining technology winners, especially in an industry as fast-moving as telecommunications, and that granting any company a monopoly over a particular platform is likely to retard innovation.
But whatever the merits of this view, it faces real world challenges, both commercial and political.
It is by no means clear, for instance, that there would be any takers for the satellite and fixed wireless components of the NBN, at least without a complete recasting of the current plan which confines their operations largely to low density markets.
And politically, it is unlikely that the electorate, with which the idea of a single national NBN is popular, will warm to the idea of such a break-up.
It is more likely, though, that the Vertigan proposal for a change to greenfields fibre provision will find favour with government. The roll-out of fibre to new estates has been notoriously slow, not least because the providers (including Telstra) who had experience in this work were squeezed out when NBN Co was required to provide the service at no charge.
As for the ACCC, don’t expect any sudden changes to its role. The Government is likely to move cautiously when it comes to major changes in institutional arrangements.
As industry commentators have suggested, this report looks more like a pro-competitive blue-print for the long-term than a set of practical solutions in the short-term – except in the case of greenfields where we could see the pace of the fibre roll-out pick up, as it needs to.
