In a recent submission to the panel conducting the NBN cost-benefit analysis and review of regulatory arrangements, TPG has presented its case for allowing infrastructure based competition.
In September last year, TPG announced plans to connect approximately 500,000 apartment blocks and office buildings in highly profitable urban areas to a fibre-to-the-basement network. This plan exploited a loophole in existing NBN regulations meant to prevent infrastructure based competition between the NBN and other network providers.
While NBN Co Executive Chairman Ziggy Switkowski has stated that allowing such competition may damage the profitability of NBN Co, TPG argues that the NBN “was never meant to be a fixed line monopoly” and that “infrastructure based competition delivers the best outcome to end users”.
This suggestion has gained broad support from iiNet, who suggested a number of conditions to level the playing field for all telcos, and the Australian Competition and Consumer Commission.
The ACCC’s submission states: “Generally speaking, the ACCC considers that, where it is economically efficient, infrastructure-based competition is likely to promote the long term interests of end-users. Where efficient network duplication can occur, competition between networks can drive dynamic efficiencies in terms of product differentiation, innovation and timely investment. Telecommunications is a complex and highly dynamic industry, and therefore there may be benefits to be gained from encouraging network-level competition and innovation. The ACCC considers that non-NBN Co network operators should generally not be constrained from deploying networks in competition with NBN Co, including in new developments, unless there are particular circumstances which suggest it would not be in the interests of end-users.
The panel of the review is expected to make their report to the government mid-year.