A leading telco expert has warned future governments that selling off NBN Co too quickly once the rollout is complete would be a huge mistake.
By 2022, the National Broadband Network build is expected to be finished and fully operational.
The sitting government of the time will need to make a decision about what to do with NBN Co – the government-owned company tasked to design, build and operate Australia’s NBN.
Telco expert Dr Mark Gregory told The New Daily the government should ignore calls to sell NBN Co soon after the rollout’s completion to avoid “chaos”.
His caution conflicts with prior recommendations by the government’s panel of experts and the consumer watchdog ACCC which support the break up of NBN Co into separate entities by technology type, such as fibre-to-the-node (FTTN).
Dr Gregory claimed that so long as NBN Co remains a single entity (and is not split by different technology footprints), it would “inevitably” have to look at upgrading inferior technologies to fibre-to-the-curb (FTTC) or fibre-to-the-premises (FTTP) – regardless of which political party is in government at the time.
He argues that retaining NBN Co under government ownership for at least 10 years would help maintain the current momentum of “positive industry disruption” – ultimately benefiting Australian internet consumers and the industry overall.
“There are 180 service providers, and prices are very competitive at the moment,” Dr Gregory said.
“This has led to a reduction in the digital divide, as telcos have been pressured to improve the quality of services being offered to customers.
“Breaking up NBN Co and selling it off would disrupt this momentum.
“The government would also be writing off $30 billion – a terrible outcome for taxpayers.”
There is no urgency to sell NBN Co, but rather benefits to keeping it in place and delaying the sale for another decade, he said.
“As it starts to pay down its debt, the company will start to become more valuable,” Dr Gregory said.
“It will also give it time to fix some of the problems with fixed wireless and delivery to remote Australia.”
While The New Daily exclusively reported last year that neither major political party has plans to fund upgrades for Australians who have been dealt the “inferior” hand of the NBN rollout – FTTN, Dr Gregory said that by 2022 upgrades would be “inevitable”.
Concerns about breaking up NBN Co before upgrades
In an April report, the ACCC urged the government to “continue planning for the future disaggregation of the NBN and ensure that measures are in place to enable the NBN to be split into competing networks”.
It argued this “competition” would encourage ongoing investment in network upgrades, deliver price benefits and improved consumer service over time.
But leading telco analyst Paul Budde, who agrees with delaying the sale of NBN Co, said he is concerned that separating the NBN will not lead to infrastructure-based competition as the ACCC claims.
“I am very worried that it will instead lead to monopolies around certain technologies in geographic areas,” he said.
Dr Gregory said that to rush into separating NBN Co would create “chaos”, contributing to a digital divide.
“I’d imagine there’d be competition for FTTP and it would be likely to expand. But I can’t imagine the same for FTTN,” he said.
“Not every company controlling each technology deployment would choose to upgrade or even compete with each other, because each technology is essentially a monopoly in the area it’s been deployed in.
“People would be left with an inferior NBN at the end of the rollout,” Dr Gregory.
NBN Co and shadow Communications Minister Michelle Rowland’s office declined to comment on Dr Gregory’s claims.
The New Daily also contacted Communications Minister Mitch Fifield’s office but did not receive a response.