The competition regulator wants the National Broadband Network to be split into three parts before it’s privatised.
The former Labor government, which created NBN Co, had planned to sell the optical fibre network within five years of its completion.
The Australian Competition and Consumer Commission agrees the NBN should be privatised, on the proviso it is split up beforehand.
“Let me make a suggestion on separation timing,” the competition regulator’s chairman Rod Sims told an NBN conference on Monday.
“It should be done prior to any privatisation of NBN Co.
“After that time, it is highly unlikely that separation will ever occur.”
Mr Sims suggested it would be in Australia’s long-term interests to create three separate entities that could be sold to provide future infrastructure-based competition.
“I will always prefer competition between infrastructure providers rather than entrench a monopoly,” he said.
The Howard government declined to split up Telstra before privatising the first third of the telco in 1997.
Telstra is now a $71 billion listed company with a monopoly over Australia’s copper wire telephone network, after being fully privatised in 2006.
When it came to NBN Co, Mr Sims said the government should avoid restricting competition in a bid to maximise the proceeds from the sale.
“There is too much at stake for that,” he said.
Former prime minister Julia Gillard vowed in 2010 to refrain from selling the NBN to Telstra or its chief rival Optus.
Both major parties support an eventual privatisation of the NBN after completion, but Communications Minister Malcolm Turnbull has previously said this would be many years away.
The federal government is required to maintain ownership of the NBN until it is built and fully operational, under existing laws.
NBN Co doesn’t anticipate the network being completed until at least the end of 2020.