Don’t repeat Telstra mistakes when privatising NBN Co, former ACCC head urges

Don’t repeat Telstra mistakes when privatising NBN Co, former ACCC head urges

Government shouldn’t seek to maximise profits from NBN Co sale

Credit: 56099550 © David May

A former head of the Australian Competition and Consumer Commission, Graeme Samuel, has urged the government to focus on the long-term interests of end-users rather than the sales price when privatising NBN Co.

The former ACCC chair yesterday told a TelSoc event he remained in favour of the eventual privatisation of NBN Co — the position of the federal government — but, regardless of who ends up owning the network operator, there should be no form of vertical integration between the wholesaler and retail services.

Samuel pointed to the experience of Telstra privatisation, where the government “privatised the monopoly without dealing with the issues of ensuring that the monopoly was either properly regulated, or more importantly, that there was structural separation”.

“One of the benefits of NBN is we’ve structurally separated the infrastructure, the wholesale operations from the retail operations, and that's the way it should be,” he said. For that reason, he said, he would “not confuse the issue” by trying to integrate Telstra’s InfraCo into the privatisation process. “It’s an unnecessary complication,” he told the forum. “It would be an inappropriate aggregation of potentially competitive infrastructure.”

He said the government should not focus on “maximising the sale price” of NBN Co while “sacrificing the future, public-interest-focused, pro-competitive structural outcomes; that is the long term interest of end users, LTIE.”

“They were ignored in the original Telstra privatisation; they should never be ignored again,” he said. “For once, I’d place long-term, public-interest-founded policy above that of short-term commercial expediency. Big ask, but it is, I think, fundamental. “

In addition NBN Co should not be privatised as a single entity comprising its urban and regional services, and its mix of technologies.

The regional services are distinct business that require government subsidy and they should be sold or retained as such,” he said.

“The urban services comprise several potentially competing technologies,” he added.

The Vertigan review of the NBN, commissioned by the government after the Coalition won the 2013 election, recommended that NBN Co be split into separate entities on the basis of technology. Samuel endorsed the conclusions of the review.

The former ACCC chair added that any USO-type subsidies for regional services “should be transparent as a line item in the budget”.

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