Telstra: ACCC is fighting to keep G9 in fibre race

The ACCC's vision of Australia's next-generation of broadband is designed to keep its rival G9 in the race to build a fibre-to-the node (FTTN) network and will sentence the country to a low speed future, according to Telstra.

The criticism comes after Telstra lodged a submission with the ACCC (Australian Competition and Consumer Commission) on the consumer watchdog's decision to reject a rival plan by the Optus-led G9 consortium to build a fibre-to-the-node network. According to Telstra, the decision was right -- but the reasons behind it were wrong.

The ACCC rejected G9's proposal on building an FTTN network, saying it potentially gave G9 too much freedom to set access prices during the last 12 years it covers, without sufficient regulatory constraints; as well as having too much discretion to change the product line-up or non-price access conditions.

However, the ACCC gave approval to the pricing regime and the "vertically separated" approach proposed in the G9 special access undertaking (SAU).

Telstra yesterday lodged a submission with the ACCC, saying it endorses its decision but believes the way the regulator envisages the next-generation network operating is "deeply flawed".

"The Commission's vision is deeply flawed: it sets goals which are not ambitious enough for Australia's broadband future; is backward-looking because the Commission remains fixated with battles which will have little relevance in an NGN world; and misses the once-in-a generation opportunity for a new regulatory compact," Telstra's submission said.

"As a result, the Commission has suggested a blueprint that exacerbates the regulatory uncertainty problem that the undertaking regime was intended to solve. It is difficult to conceive of a better illustration of why firms are not investing under the regime as it is presently administered: the Commission's idea of a solution to the uncertainty is to build into the SAU ever wider discretions for itself to revisit fundamental aspects of the regulatory compact."

The submission also criticises the ACCC on the issue of broadband speed saying the organisation is not ambitious enough and its "definition of next generation broadband is designed to keep the struggling G9 ADSL2+ proposal in the race".

Telstra also labels the ACCC's approach to pricing as "surreal" saying: "Rather than seek pricing solutions which allow investors to manage this uncertainty [of future demand levels] ... the Commission's answer is to require periodic pricing resets every few years subject to review and control by the Commission."