Infrastructure lobby pitches ACCC to set NBN access prices

Australia's competition watchdog should be appointed as overseer of the national broadband network and be "directly involved" in setting access prices, according to a national infrastructure forum.

In a submission to the Senate Select Committee on the NBN, Infrastructure Partnerships Australia said the Australian Competition and Consumer Commission's (ACCC) existing regulatory responsibilities in the sector - combined with its experience regulating the gas and electricity sectors - made it most suited to an oversight role.

The competition watchdog should also "be directly involved in setting the initial prices for access to the new NBN", the submission said.

But more resources are needed before the watchdog could effectively take on the role.

The forum also advocated structural separation of Telstra to introduce reform to the current fixed line market.

It proposed Telstra shareholders be compensated "through the splitting of existing shareholdings in a one-for-two exchange of shares".

Under the proposal, each existing Telstra share would be replaced with one share in the retail and wholesale arms respectively.

Separation was necessary, the forum argued, not only to facilitate greater competition until the NBN is ready but also to save Telstra from having the value of its copper network eroded entirely by the new network.

"Following the introduction of the NBN, it is likely that the existing copper network will become devalued, subsequently threatening total shareholder value," the submission said.

"However, through the separation of the entity, the value of the Telstra retail business, including fixed line retail and arguably the world's fastest 3G mobile service, is assured and the wholesale business opens itself to increased flexibility in terms of long-term innovation, such as very high bit rate DSL, which is successfully utilised internationally to deliver broadband speeds of up to 100Mbps."

The forum also said that the "small size" of the Australian market and the high fixed costs of building network infrastructure for high speed broadband "will mean duplication of the NBN is unlikely, even over the longer term."

This increased pressure on the Government to ensure the NBN regulatory framework is adequate to ensure competitiveness and prevent a repeat of issues that have plagued the fixed line sector over a number of years, the forum said.