NBN Co sale shouldn't be about price, says ex-ACCC chair

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NBN Co sale shouldn't be about price, says ex-ACCC chair

Lessons to be learned from Telstra's privatisation.

NBN Co shouldn’t be privatised in the short-term or at the expense of users' best interests, former Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel says.

Speaking at a TelSoc-run ‘NBN Future Forum’ in Melbourne, Samuel backed the eventual privatisation of NBN Co but set out conditions he believed should be met first.

Samuel said a short-term sale would be a bad idea due to the negativity and uncertainty around the network.

“I wouldn’t sell it in the short-term but for a very good reason, and that is it’s all too uncertain at the moment,” he said.

“The speculation on NBN is significantly negative at the moment, with a lot of negative commentary.

“There’s all sorts of challenges as to costs, blowout of time, issues about the success of the rollout, the wholesale costing, and then the potential challenge from 5G etc.

"Those issues create too much uncertainty for a short-term privatisation.”

Samuel said that any privatisation process should occur only once NBN Co enters a business-as-usual phase; that is, it demonstrates stability as well as a vision for the future of the network.

Equally, however, Samuel implored whichever government that winds up overseeing the sale to approach the process with end users in mind.

“I would not structure a transaction that focused on maximising the sale price,” he said.

“Can I just repeat that - do not structure a transaction that focuses on maximising the sale price whilst sacrificing the … long term interest of end users (LTIE). 

“They were ignored in the original Telstra privatisation - they should never be ignored again. 

“In other words, for once, I’d place long-term public interest founded policy above that of short-term commercial expediency. Big ask, but I think it is fundamental.”

Samuel believed that NBN Co should eventually be privatised - the biggest remaining question was how to go about it.

“I would not keep it in government hands in the longer term,” he said.

“Let’s not worry about whether it’s 3 years, 4 years or 5 years [out]. 

“I would have thought there would be very few people - even the idealogues - who would say that we ought to be retaining businesses in government hands. 

“The real issue is how do you privatise, how do you take it out of government hands to bring it into the private sector. That, I think, is the issue we have to look at very carefully.”

He believed one way not to do it would be to allow NBN Co to be snapped up by Telstra’s InfraCo, which has been circling in recent months.

“I wouldn’t allow any form of vertical integration,” he said, noting the decades ACCC staff - including himself - spent battling with the effects of a vertically-integrated Telstra.

“I would not confuse the [NBN privatisation] issue by trying to integrate Telstra’s InfraCo into the process. 

“It’s an unnecessary complication [and] it would be an inappropriate aggregation of potentially competitive infrastructure.”

Samuel backed the 2014 Vertigan Review’s recommendation to break NBN Co up into pieces when it is ready to be sold.

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