And the taxpayer flogged off Telstra.
yeah, but the Howard government chose to maximise their short term returns by flogging off telstra as a vertically integrated entity. They thought that access regulations would be enough to keep their market dominance in check but in practice the ACCC doesn't have enough teeth to act quickly.
Michael Malone, managing director, iiNet
Nobody denies Telstra's right to compete in the market, on a fair basis. We're more than happy to meet and beat Telstra on customer service, product innovation and cost management.
But where there is no wholesale competition, Telstra is using its ownership of the network to give its own retail arm an unfair advantage.
Right now, Telstra is selling a retail ADSL2+ broadband service for $49.95, as you can see headlined right here.
But Telstra charges more than $49.95 just for the port!
The port access is not the whole broadband service, it's just one component of it, and Telstra is charging more for that component than their retail arm sells the whole product for.
IInet complains to the regulators and two years later Telstra gets slapped on the wrist...... but in that time they have already tied up many customers to 12-24 months contracts.
How can you expect the market to work if other telcos are forced to compete with a giant which has had its infrastructure paid for by the taxpayer and doesn't want to play fair?
That was my point re above. If Telstra got such a brilliant deal then I am not sure why the NBN is now more rather than less viable with respect to private financing.
I have no idea whether Business Speculator are talking out of their arse..... but why can't it be a win win situation?
Telstra gets to flog off a dying infrastructure which is costly to maintain and gets paid to transfer its customers over. They also get to decommision roughly 5000 telephone exchanges as the NBN consolidates the network to 200 or so Points of Interconnect. Real estate developers will be licking their lips.
NBN on the other hand, doesn't have to worry about Telstra competing in the fixed line wholesale market and undercutting their prices. Capital costs are reduced because they are using existing infrastructure rather that digging new trenches.
What happens now to broadband in metro areas? Does Telstra just sit on its hands?
DSL market is still strong and stable despite the uptake of wireless services. As long as you're lucky enough not be be stuck behind a RIM and reasonably close to the telephone exchange, Metro areas will be fine untill the NBN comes a knocking.
Telstra will just continue being Telstra. Bullying competitors and aggressively signing up new customers to long term contracts in wait of the NBN handout.