1 / 10

National Broadband Network: Some Big Policy Issues

National Broadband Network: Some Big Policy Issues. 7 April 2009: a very significant announcement. How has the current system failed to meet its objectives? How important is the growth of broadband? What are the priority issues to turn the announcement into reality?.

rafal
Download Presentation

National Broadband Network: Some Big Policy Issues

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. National Broadband Network: Some Big Policy Issues

  2. 7 April 2009: a very significant announcement How has the current system failed to meet its objectives? How important is the growth of broadband? What are the priority issues to turn the announcement into reality?

  3. Has the current system met its objective – of driving competition?

  4. Telstra’s Vertical Integration is a particular problem in today’s market Because Telstra is vertically integrated, it can undermine retail competition in a way that the current regulatory system cannot control effectively Telstra Networks Telstra Wholesale • Telstra can refuse to sell services to its retail competitors – egBusiness Grade DSL – Telstra refused to sell to Optus for a year • Telstra can provide higher performance standards to its retail customers than wholesale customers – eg connection times • Telstra can impose retail-wholesale price squeeze – eg (1) when Optus entered residential DSL market in 2004, Telstra reduced its entry level package price from $59.95/month to $29.95; eg (2) in December 2005 Telstra increased wholesale line rental prices by $3.45 while not changing its retail line rental prices Sells wholesale services Telstra Telstra’s retail competitors eg Optus Telstra Retail Sells retail services Sells retail services Retail customers Retail customers

  5. Optus enters DSL market, TLS drops price Case study: Telstra’s use of its market power to suppress the take up of broadband How Telstra choked off take-up: • High retail prices until Optus’ entry in 2004 • Retail-wholesale DSL price squeeze in 2004 • Capped speeds at 1.5 Mbps for ADSL1 • No ADSL2+ except where competitors had initiated, until Feb 08

  6. Today’s broadband market still dominated by Telstra – but unbundling is a bright spot Broadband Market mid 2008

  7. Transition to fibre based networks Today • Copper from exchange to home • With unbundling, either Telstra or competitor can install DSLAM in exchange and use copper to deliver DSL Telstra Exchange Fibre Telstra network Customer Home Distribution Pillar Telstra DSLAM Competitor DSLAM Competitor Network Fibre Copper wire Copper wire Telstra Exchange Telstra network Fibre Customer Home FTTN • Fibre from exchange to node • Copper from node to home Node Competitor Network Fibre Copper wire Fibre

  8. Telstra sought to use transition to secure a new monopoly

  9. The way forward: structural separation of NBNCo Private Sector Investors Private SectoInvestors Government • 51%+ owner initially • Will sell down after 5 years • Own < 50% initially • Individual caps at 20% Sells services National Broadband Network (NBNCo) Sells services Other Retailers

  10. Key aspects of pre NBN regulation remain to be resolved • Will Telstra be subject to ‘functional separation’ or even ‘structural separation’? • Will Telstra be required to divest itself of • HFC network? • Stake in Foxtel? • Will price setting process be streamlined?

More Related