Turnbull attacks watchdog for decision on Optus, NBN deal

Coalition communications spokesman Malcolm Turnbull has slammed the Australian Competition and Consumer Commission for its decision to approve a deal between the NBN Co. and Optus that would remove any market competition for the national broadband network.

The comments come as critics have attacked both NBN Co. and Optus for the deal, which they say will strip the market of any competition.

The competition watchdog last week released a draft decision to authorise the decommissioning of Optus’ hybrid fibre-coaxial cable network, in return for a payout of $800 million from NBN Co.

“Without a doubt, the NBN is being set up for all intents and purposes as a statutory monopoly,” David Kennedy, research director at analyst firm Ovum, told SmartCompany this morning.

“What this decision will mean is that there isn’t an infrastructure competing with the NBN in the long run.”

In a speech to Parliament yesterday, Turnbull said the draft determination was a “thoroughly unconvincing and contradictory document”, and he attacked the Federal Government for paying the market to remove a competitor.

“The truth is that everywhere in the world HFC cable networks are providing very high-speed broadband and real, effective, commercial competition with fibre-to-the-premises networks, fibre-to-the-node networks and various variations on those two.

“We have the potential here at least of the Optus network being available to do that – not over all of Australia but over a large percentage of Australia.

“For the ACCC, which is supposed to be flying the banner of competition and ensuring that monopolies are kept in check, to say, ‘No, this deal can go ahead,’ is abandoning its charter.”

Turnbull says the ruling should be abandoned and replaced with one that “would be more consistent with its distinguished track record”.

Turnbull also pointed out the ACCC disagrees with the NBN Co. in the document, saying it rejects the NBN argument that if the Optus deal is delayed it will suffer delays in the construction rollout

Kennedy says that “without a doubt”, the NBN is being set up as a statutory monopoly.

“That is a clear shift away from the policy of infrastructure-based competition, which has guided telco policy since 1991. Obviously this is a very different approach.”

“The deal essentially means the NBN won’t be constrained by any competitive pressure. It’ll be constrained by regulation, but to the extent the market will restrain it, it won’t have competitive pressure in the infrastructure space.”