ACCC rejects G9 proposal with a thumbs-up

ACCC rejects G9 proposal with a thumbs-up

Summary: Competition watchdog the ACCC has rejected a draft proposal by the Optus-led G9 consortium on building Australia's fibre-to-the-node network, despite giving the plan a cautious thumbs-up.

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Competition watchdog the ACCC has rejected a draft proposal by the Optus-led G9 consortium on building Australia's fibre-to-the-node network, despite giving the plan a cautious thumbs-up.

The draft proposal, lodged in April this year by the G9 consortium, saw it propose the creation of an open access fibre-to-the-node (FTTN) network to be run by a separate company it created, named FANOC.

The proposed system would see FANOC offering wholesale broadband and voice telephony services over the FTTN network, without itself participating in any retail activities.

While the ACCC noted it has no technological favouritism, it says it is satisfied with the pricing structure and the "vertically separated" approach used by the G9.

"The ACCC also considers that a vertically separated ownership model could reduce incentives for the access provider to discriminate between downstream users of the access service and, therefore, facilitate strong and effective competition between access seekers in retail markets. Where such an ownership model is in place, the ACCC considers the need for regulatory oversight of non-price terms and conditions of access, in particular, could be relatively low," the ACCC said in the document responding to the draft.

The SAU (Special Access Undertaking) projected monthly pricing for FANOC is in the range of AU$25 for voice-only services and AU$29 to AU$50 for various voice and broadband packages.

"The ACCC is generally comfortable with FANOC's proposed long-term approach to pricing, which would provide a high degree of regulatory certainty for significant new investments, and notes the initial prices for the first three-year access period may be in the appropriate range," the draft decision says.

However, the decision voices concerns that G9 may have too much freedom to set access prices during the last 12 years the SAU covers, without sufficient regulatory constraints; as well as having too much discretion to change the product line-up or non-price access conditions.

As a result, the document has been rejected by the ACCC and the G9 group is now expected to rewrite the document to make it more amenable to the regulator.

Despite the rejection, members of the G9 consortium, which includes ISPs such as Optus, Internode, iiNet, Primus and AAPT, welcomed the ACCC's comments.

"We always knew that obtaining regulatory approval would be a process involving a number of steps over many months," iiNet chief executive Michael Malone said in a statement. "Today's decision by the ACCC is an important milestone in that process. We now have a clear direction in which to proceed as we work to resolve the ACCC's remaining issue."

Topics: Telcos, Broadband, Government, Government AU, AAPT, Optus

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8 comments
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  • Common sense.

    The con trick rolls on. Hopefully Prime Minister Rudd and Senator Conroy are awake to the trickery and subterfuge that G9 hopes to deliver on the Australian people. Once they are granted the go ahead with their plan you can believe that the snouts will be in the trough for Government handouts. Another billion would be acceptable as happened with Opel.

    I would think that our new Government will realise that the only company with the financial and technological capacity to deliver the required system is Australia's Telstra and also, it is in Australia's national interest to keep our communication facilities in our own control.
    anonymous
  • lol

    not, Telstra is in American hands - Telstra wanting to get rid of competition.

    While Telstra do have the ability do this rollout, i believe rolling out FTTH is much better option anyway, but however, I wouldn't want the current management to be the ones who do it.

    And also I believe that Separating Wholesale/Retail should be done before anything else.

    FTTN is a dead end technology and thus will bring us to the dark ages again just like ADSL2+, leaving us behind the other nations who are rolling out FTTH.

    If you spend the money on FTTN, you will not only waste resources, but time as well, we will have to wait a very long time to rollout FTTH and rollout an entirely new network anyway.

    And thus FTTH is the best option!
    anonymous
  • Telstra

    Until telstra is split up they should be prevented from expanding their monoply any further. I find it hard to belive that any company could be more ruthless in milking the consumer than they have proved themselves!
    anonymous
  • Disclosure

    I note you don't disclose that you're a paid Telstra shill.
    anonymous
  • Re. Telstra

    If find it most amusing that whenever there's an article about telecoms, no matter who is being praised/chastised, the same old tired Telstra haters come out of the woodwork to put their 2 cents in - LOL. Even when totally off topic! I thought this was an article involving the G9's rejection (with a little 'thumbs up' icing, from Jo) and don't recall seeing the word 'Telstra' once when reading? So why the above posting? Anyway... Now I may be wrong, and if so will certainly stand corrected, after all I'm no more of an expert than the previous bloggers, who have opinions but no real concept of fact! But in reply to the 'off topic' comment, perhaps you should delve a little deeper than your basic telephone/bb bill, and/or the latest beat up in the media and look at the overall, entire Telecommunications sector, before referring to Telstra as a 'monopoly'. If you care to do so, I think you may just find 'Optus' and IPStar (Thaicom iv) - both partially owned by the Singapore Gov't - actually own "our" major satellites. The Southern Cross Cable is 40% owned by 'Optus', whilst the AJC cable is only 20% owned by Telstra - these cables link us to Asia, USA etc. OPEL is 'Optus'/Elders, Virgin are owned by 'Optus' and the G9's major player is? Yes Optus! So in the face of all this, although certainly in a position of strength re: ULL, Telstra can hardly be "realistically" referred to as a monopoly! However, it seems to be an avenue for mutual back slapping and guffawing for all the typical, mindless, Telstra haters, who frequent these trashy blogs!
    anonymous
  • It's not a voice network!

    What do we want to enrich with a network upgrade. Do we want to enrich our future or do we want to enrich a bunch of corporate flunkies who cannot think outside the square.

    We no longer need Telstra to build what is essentially a data network and not a voice network.

    Giving design/build ownership to our universities will also benefit the schools of the future policy. Initial infrastructure costs can be higher because there will be little or no rental costs associated with the "education institution" owned network. Wholesale bandwith and maintenance can be sold off to Telstra and company who can bring it to the homes or use it for other commercial interests.
    anonymous
  • Anyone see a blog?

    No me neither
    anonymous
  • Love the comments

    WOW!

    Lets look at the comments so far, someone places a comment about the story, two people attack Telstra, one places more (very valid) comments about the story, one person pick on the use of the word Blog, one makes an accusation about the motives of the author of comment number 4 and then someone makes a comment about the story that does not defend or attack Telstra and no one seems to be want to comment further.

    Face reality folks, there are people defending Telstra and people attacking Telstra. What I seem to see is the ones defending / singing praises for Telstra try and use rational arguments while the rest try and use silly one liners and rhetoric.

    I am sure if this story was written with the heading "ACCC rejects Telstra proposal with a thumbs-up" you would be out in force saying see once again Telstra is screwing the country.

    Get real people, this is a forum for mature discussion and not for blatant political game play.

    Just for the record, I think comments 4 & 7 are the only two here that hold any ground.

    It's about time ZDNet started making people register before they can post a comment.
    anonymous