Vertigan NBN report revives telco industry divisions

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Vertigan NBN report revives telco industry divisions

Panel findings an expensive distraction

A review into Australia's national broadband network project which recommended NBN Co be split up has reinvigorated the deep division between Telstra and its rivals in the telecommunications sector.

The proposal to split NBN Co into separate business units in line with its network technologies was the key recommendation among 19 that Dr Michael Vertigan and a panel economist put before the federal government.

While Telstra, Australia’s largest owner of telecommunications infrastructure, has broadly given its support to the review panel’s recommendation, its competitors expressed dismay at the proposal.

In a statement, a Telstra spokeswoman said the carrier welcomed the panel’s view that consumers would benefit from privately-led infrastructure competition in the industry.

However, the telco stopped short of supporting any immediate move to break up NBN Co.

“Given how far down the road the NBN policy is, it would be too disruptive to introduce many of recommended changes in the short term,” the spokeswoman said.

“We agree with the Government that these issues need to be handled sequentially. We welcome the clarity from the Minister that the focus at the moment remains on finalising the multi-technology approach, improving the NBN experience for customers and providing certainty on the FTTB question”.

In sharp contrast, Mark Dioguardi, chief technical officer of Australia’s third-largest broadband provider, iiNet, said the Vertigan panel review had created an unnecessary distraction.

“We remain more interested in the speedy rollout of the NBN than the distractions presented in this report. The rollout may have been fitful to date, but it’s finally starting to deliver the kind of faster, more reliable broadband Australians are crying out for," Dioguardi said.

“We also note that, after many decades, the NBN finally delivers a level-playing field based on a structural separation between the network and retail service providers. Any move away from this intent should be rejected by the government, and we welcome further consultation on this issue."

iiNet’s position was in line with that expressed by the Competitive Carrier’s Coalition (CCC), which represents the Perth-headquartered ISP alongside Vodafone and Optus.

The CCC lambasted the review’s findings as an "expensive distraction" that has "done little more than create uncertainty and disquiet across the industry".

“The time for historical revisionism and point scoring is long gone. The priority for the Government should be speeding up the structural separation of Telstra, the building of the NBN and the reduction of prices for basic services to all Australians, which remain disgracefully high – among the highest in the developed world,” the coalition said in a statement.

Representatives of the federal Department of Broadband Communications and the Digital Economy today told a senate hearing on the NBN that the panel was paid $420,000 to produce the regulatory review and an associated cost-benefit analysis.

A further $660,000 to $725,000 was paid for research to assist the panel. The department was unable to provide the exact figure to the senate committee.

Dr Vertigan was paid $1500 per day and his colleagues on the panel were paid $1400 per day.

Representatives of the panel were scheduled to appear before senate committee later today.

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