Is Optus already throwing in the towel on FTTN?
commentary If analyst group CEG speaks on behalf of Optus, it looks likes we can assume the carrier has given up on its chances of winning the coveted NBN (national broadband network) tender being considered by the Department of Broadband, Communications and the Digital Economy.
A new report commissioned by Optus, compiled by think-tank Competitive Economics Group, predictably argues that the winner of the NBN should be subject to structural separation rather than operational separation.
It's nothing new — back in December 2006 the Competitive Carriers Coalition commissioned a similarly themed report by the Allen Consulting Group. And you'd find few telecommunications analysts that disagree with the premise.
What's far more interesting isn't the recommendations of the report — but the language CEG uses — language that infers that Optus is already throwing in the towel on the tender.
CEG analyst Jason Ockerby told ZDNet.com.au that despite the report being written in the context of the NBN, "the scope of the report isn't to comment on any tender's merits".
Nor is it supposed to be an outright attack on Telstra, he said. "Optus has put up a bid, it has put its AU$5 million deposit down, this advice would equally apply to Optus if it won the tender."
Yet the language of the report does assume that Telstra will win. Here's one example:
"Without structural separation, Telstra will have very powerful incentives to damage competition in downstream markets that rely on access services provided by the NBN. In fact, regulation of access prices without structural separation may increase the incentives to damage competition in downstream markets."
Surely Optus, in commissioning the report, would have asked CEG not to be so defeatist in its approach.
For the sake of end users, it's not the kind of language anybody wants to hear from Optus. We want to hear that Optus wants to invest, that Optus wants to win. In fact, we want to hear that from every party to the tender.
One can assume that Optus wouldn't want to be "structurally separated" should it be the victor — so simply by virtue of releasing the report, it appears the carrier is already looking toward the future — a future where Telstra inevitably wins, and the expensive task of regulating them is the remaining concern.
I hope for all of our sakes I'm wrong.