Telstra makes case for NBN cherry-picking

Telco says market theory argues it "should be allowed" to pick and choose.

Telstra has a "difference of opinion" with the Government and a key Greens senator on proposed cherry-picking provisions in NBN legislation before Parliament, saying the controversial rules should be culled.

Director of government relations James Shaw today said the carrier wanted to see the rules "repealed".

Anti cherry-picking rules were to stop carriers other than NBN Co rolling out superfast networks "only in high-income and low-cost, high-density areas and then undercutting NBN Co's average price due to the lack of any need to subsidise operations in higher-cost areas", according to the NBN implementation study.

Greens senator Scott Ludlam argued that private industry should not be allowed to "pinch easy bits" ahead of the NBN, leaving taxpayers to foot the bill for fibre rollout to the more expensive parts of the country.

He argued that cherry-picking would interfere with the Government's plan to cross-subsidise more expensive regional rollout costs "by charging a little bit more in the cities".

"How can they [NBN Co] do that [cross-subsidy] if you cherry-pick?" Ludlam said.

Shaw said the "theory of markets" supported cherry-picking.

"We look at it through the prism of economic efficiency," he said. "If a market can function with that competition in there, then it should be allowed".

Senator Ludlam responded, saying that "sounded like something out of a textbook".

Shaw said it was a policy area where Telstra had a "difference of opinion with the Government".

Carriers and ISPs have condemned the anti cherry-picking rules, arguing they go too far and could stifle even simple upgrades to existing fibre networks.

Various amendments and exemptions have been proposed, while others such as Telstra have called for the rules to be scrapped altogether.