NBN will replicate dysfunctional market: Vic
Victoria's Coalition State Government has heavily criticised the Labor Federal Government's flagship National Broadband Network (NBN) policy, arguing in a submission to a parliamentary inquiry into the network that the project could see the telecommunications sector's existing "dysfunctional" market structure replicated, and competition put at risk.
The new State Government had already been a critic of the NBN since its election in late 2010, confirming in December that it was planning to pursue an opt-in policy with respect to the NBN connections, rather than an opt-out policy that would see all Victorian premises receive the NBN by default.
In a submission to the Federal Parliament's House of Representatives inquiry into the NBN (PDF), the State Government took its criticisms further. The submission was first reported by The Australian.
"The increasingly apparent risk is that the Commonwealth could, over time, fully replicate a dysfunctional telecommunications market structure that has hindered investments in the current broadband market," the state wrote. "This would be the result if it simply replaces Telstra's market power with an NBN Co infrastructure monopoly with all the attendant inefficiencies and constraints on investment, innovation and future policy making."
Furthermore, Victoria argued that the NBN posed "substantial and serious risks" to the long-term development of competition in broadband markets, "potentially holding back future broadband investment, market development and innovation".
Federal Labor had put in place "excessive" protections for NBN Co from competition, Victoria argued, such as signing deals with Telstra and Optus, which force the pair to stop providing broadband services over their hybrid-fibre coaxial networks, and extending the NBN network into "upstream markets" such as the inter-regional backhaul market.
In addition, the Victorian Government criticised the Federal Government for regulations which would prevent so-called "cherry picking" of the NBN, where potential infrastructure competitors build infrastructure within viable areas already served by NBN Co.
The Victorian Government also echoed complaints by the Federal Coalition about the NBN strategy that many educational and health institutions already have access to fibre broadband, and so would not benefit from additional roll-outs under the NBN.
Despite this, the state noted the importance of broadband in general to the future development of its economy, and noted that current broadband services were currently inadequate in some areas.
"Without sustained infrastructure investment, currently adequate services will fall behind community expectations within the next ten years," it wrote. It particularly highlighted the current market structure, dominated by Telstra's ownership of the national copper network, as a problem.
The news comes as other states have taken differing approaches to the NBN. Labor-dominated Tasmania has proven a staunch supporter of the project, as has Queensland, while the new NSW Coalition State Government has yet to make its voice heard on the matter in any substantial manner.