Productivity Commission investigates NBN Co

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Productivity Commission investigates NBN Co

Probes greenfields role.

The Productivity Commission has committed approximately three months and a full-time employee to investigate allegations of anti-competitive behaviour by NBN Co in new housing estates.

Commission chairman Mike Woods told iTnews that he would also personally assist in the investigation, along with another research officer.

“We understand the importance of the investigation and we are resourcing it we think suitably," he said.

Although it was anticipated to run for three months, Woods could not set a specific timeframe to wrap up the investigation when he fronted a parliamentary hearing Friday.

The investigation was sparked by three separate complaints from private greenfields fibre builders, led by Greenfield Fibre Operators Australia chairman and OPENetworks' Michael Sparksman.

The coalition of operators were concerned that NBN Co was promoting its role in greenfields as a "provider of first choice" to housing estate developers, rather than as the "provider of last resort" under its Federal Government mandate.

TransACT chief executive Ivan Slavich said a last resort situation would involve NBN Co only rolling out fibre in cases where third party operators had faced difficulties installing fibre or issues external to the development.

Sparksman had alleged that proposed greenfields legislation and the actions of NBN Co to date were "anti-competitive".

 "The Australian Government is also ignoring its own competitive neutrality policy that the government has for government-owned enterprises like NBN Co," he said.

"That policy dictates that no competitive advantage should be given to the government-owned business over private sector competitors by virtue of its public sector ownership or by using fiscal or regulatory powers."

He said the Government should fund competitive greenfield fibre operators on the same basis as NBN Co in estates where the developer had chosen a third party.

Cost-benefit analysis edges closer

Shadow communications spokesman Malcolm Turnbull continued to push Woods to undertake a cost-benefit analysis of the National Broadband Network on Friday.

He sought a specific comparison of fibre-to-the-premises (FTTP) and the fibre-to-the-node (FTTN) technology, the latter which he had been trumpeting as a more cost-effective solution.

Independent Senator Nick Xenophon went so far as to suggest that the parliamentary committee could submit a formal terms of reference for such an analysis, which would suit the scope of the commission’s duty as dictated by Prime Minister Julia Gillard. 

“Depending on the specific nature of the request, if it’s a matter that is brought within our information knowledge and capacity then we would [do it],” Woods said.

“We’re here today to assist the committee in its deliberations.”

The commission has supported the notion of a cost-benefit analysis of the project for some time, submitting to the original Senate inquiry into the project in 2009 that such a project could even “gold plate” the Government’s proposal.

Woods further pushed the idea during the hearing, stressing that in any situation, the “lowest cost is not always the best outcome”.

“It’s a matter of working out what options produce the best benefits,” he said.
“Sometimes the net benefit of that option can be greater than the option based on the cheapest possible cost.”
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