Open hostility between Telstra and Terria over NBN

The open hostilities were sparked by comments in today’s The Australian. Terria, a consortium of telecommunications companies, said that the National Broadband Network (NBN) must be a monopoly to survive.

“Our proposition to the Government is that no party be allowed to expand the network and operate in competition to the national broadband network,” said Terria bid manager Mick Simmons.

“Because of Australia’s size and population this network must be a monopoly and must be structurally separated. If you don’t have a structurally separated monopoly network where access prices are regulated, it will not be viable.

“So you must preclude any alternative broadband network," Simmons said.

Telstra shot back this afternoon that a monopolised broadband network would make Australia 'an international laughing stock'.

“Terria’s stunning demands show it wants to take Australia back to the last century and re-monopolise the nation’s telecommunications industry, depriving Australians the choice and innovation produced by true infrastructure competition,” said David Quilty, Group Managing Director for Telstra Public Policy and Communications.

“While Terria crows about fairness and encouraging competition it is really the monopolist hiding in the shadows.”

Terria and Telstra are vying for a contract to build the NBN, potentially worth $30 billion. The Rudd government will invest $4.7 billion in the network, making it the largest infrastructure commitment by the new government.

Simmons told iTnews that "Mr Quilty is clearly just getting out of bed on the facts of the new NBN.

“NBN is by its very nature going to be akin to a monopoly asset and therefore requires appropriate regulatory controls to be placed around it. This is why Terria has consistently called for structural separation to enable genuine equivalency of access for all competitors.

Telstra on the other hand wants less regulation than exists today.”

Surprisingly, the lobbying effort has faced off two former political colleagues –- former Premier Bob Carr and his treasurer Michael Egan.

Carr is a consultant for Macquarie Group and legal firm Mallesons Stephen Jacques, both of which are advising Telstra on its bid.

“I think it’s very important that Australia has a high-quality broadband network,” Carr told The Australian. “Telstra is the only entity that will be able to put that in place in the required time.”

Egan has chaired the Terria consortium since June this year. When asked by The Australian about any rivalry between him and his former political master, Egan seemed unconcerned.

“Bob and I are good friends, and even in politics we would find ourselves arguing for different propositions.”

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