NBN's success on a knife's edge: Optus

NBN's success on a knife's edge: Optus

Summary: Optus has thrown its support behind the National Broadband Network, but also warned that the telecommunications industry is on a knife edge, claiming that NBN Co is the next big monopoly and needs to be tightly scrutinised.


Optus has thrown its support behind the National Broadband Network, but also warned that the telecommunications industry is on a knife edge, claiming that NBN Co is the next big monopoly and needs to be tightly scrutinised.

Speaking at CEDA's (Committee for Economic Development of Australia) CEO Vision Series in Sydney, Optus CEO Paul O'Sullivan said he was doing "something very unfashionable in Australia today" and throwing his full support behind the NBN.

"I'm going to get behind the NBN. I think it's a bloody good thing. It's going to bring about the creation of a national, high-speed broadband network and a reform of our industry."

But O'Sullivan also said the concept was close to disaster.

"The NBN is on a knife edge. It could go either way — it could be a major success, or it could be huge failure," he said.

"We are re-establishing a government-owned monopoly at a time when most of the rest of the world is taking them apart. Let's remember that the NBN might be a wholesale-only network — it may not have the incentives to discriminate against other players the way Telstra has — but it will still be a monopoly.

"It will probably be the most powerful monopolies we have ever had in Australia. It is vital that it is subject to a forensic level of scrutiny and strong regulatory oversight.

"For the NBN to work, it would be foolish to rely — to trust — on the monopoly doing the right thing."

O'Sullivan raised five key issues with NBN Co that he claimed weren't new and that he considered to be common sense.

"The mere fact that I have to propose them tells you how far back [the industry is] in the whole debate."

  • O'Sullivan wanted the Australian Competition and Consumer Commission (ACCC) to ensure that the NBN's spending was monitored.

    "I'm sorry, but this is an infrastructure monopoly. Someone's got to make sure its spending is efficient because it's a monopoly and if they spend too much, you and I will end up paying for it," he said.

  • His second request was a cap on the number of price changes the NBN would be allowed to make.

    "There should be no presumption on the part of NBN Co that prices can rise over time," he said.

  • O'Sullivan also wanted the ACCC to be granted powers to force NBN Co to outsource activities to others if they could do it better.

    "If the NBN Co can't do something well, it should face competition for providing those services."

  • He highlighted the lack of quality of service and innovation targets in current wholesale contracts, and the lack of improvement measures for NBN Co's customers.

    "The NBN Co should actually have quality of service and innovation targets. It doesn't. Incredibly, the current wholesale contracts provide no service or performance guarantees to customers."

  • He called for greater transparency of the company's leadership.

    "Such a large organisation could be very attractive to vested interests, so we think it should have the same transparency and bipartisanship as the Reserve Bank," he said.

    "There should be a register of contract between the government and NBN Co to limit undue influence. The minutes of board meetings should be published and there should be public consultation before there are any major changes to NBN Co's market plan. That's not that radical," he said.

Topics: NBN, Broadband, Telcos, Optus, Telstra

Michael Lee

About Michael Lee

A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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  • These are all quite reasonable but we should be very careful not to over regulate NBN Co. At the end of the day they are still a business and need to operate like a business. Over regulation could expose NBN Co to many more vested interests than less regulation. The focus should be on the balance of regulation.
    • Its better to over regulate a monopoly than under regulate it. Remember that the eventual aim of the government is to privatise NBNco to recoup our cash. If they do that and it's under regulated, then everyone will suffer for it.
      • And...

        We will have a fibre network ready for our nations future.. WHILST, being no worse off than we are now, regulations wise, with Telstra...

        No matter what happens, imo, the NBN WILL be an improvement both technologically and regulatory...!

      • Remember that every regulatory measure will be introduced by the government of the day, not responsible business figures. Knowing this, the responsible position would be to find a balance of good regulatory measures and not have a view of over regulation. Anyone who views the free market favourably should agree.

        If NBN Co can not make necessary business decisions due to over regulation, NBN Co will suffer and so will the Australian people if there was ever decision made to privatise the company.
  • @omega, you have a good point. Apart from the usual suspects who blindly oppose NBN for obvious political or corporate reasons, there will probably always be some commercial argy-bargy from NBN customers, the ISPs, trying to talk themselves into a better bargaining position.

    Everything old is new again?
  • control of commications should remain in australian goverment hands it was owned by the goverment of the day PMG they sold part known as :- telecom it was still under control then the goverment of the day sold the rest what happened nooo control now what we once owned we have to pay through the nose to get it back.
    bryon j bartley