Retail clause and the telcos
I realise that – at least if one follows the media – it might look like that I am one of the few people who support the retail clause in the proposed NBN Co legislation. But I am convinced that the media, who have been spreading the stories that the government will start supporting retail sales on the NBN, have got it wrong.
I can fully understand that without an integral knowledge of the situation it is very difficult for anybody on the outside to understand what is going on.
Very few telcos have shown any great opposition to the clause. And if they thought that this would undermine the competitive environment, believe me they would have jumped up and down. They might have some concerns but those can be addressed in the submissions the government has asked for.
Of course the government is partly to blame for the poor press, as it has failed to properly explain the matter, and is now leaving it to people like me to do that work for them. The could have emphasised more that this clause was there for ‘special circumstances’ only and that such an exemption it would be overseen by both the ACCC and the Parliament..
I would like to repeat what I said in my first analysis. Why are we building the NBN and why are we spending billions of taxpayers’ dollars on it? Is it simply to create a better competitive environment so that lots of companies can make lots of money? I don’t subscribe to that. The NBN most certainly will deliver that environment as well, but that is not the main reason for such a massive government investment.
We will develop this infrastructure so that on top of it we can build a whole range of other services. I call this the trans-sector approach. Other sectors like healthcare, education, energy and public safety can use this utility broadband infrastructure to build their own services, such as the monitoring of patients and aged people living at home, tele-diagnoses and health checks from home, e-learning, the installation of home automation networks for energy management, the use of renewable energy and the use of electric vehicles.
The social and economic benefits of this are publically supported by the United Nations, the OECD, the Obama Administration, governments in Europe and our neighbours in New Zealand. And the country that initiated this global trans-sector strategic direction – and the country that is leading it – is Australia.
So we must be doing something right here!
That’s why the ‘retail clause’ is in the proposed legislation. We must ensure that a trans-sector use on the broadband infrastructure is possible (this means that this broadband infrastructure can be used at the lowest possible price in order to deliver those social and economic benefits).
I am convinced that there is no intention whatsoever on the part of the government to use this clause for any services other than those that are in the national interest.
Could this have been done in another way? Yes, certainly, but NBN Co is adamant that it wants to deliver as basic an infrastructure service as possible and that view is shared by the government, and by the industry. However this approach could lead to a network being built that is so basic that these other sectors cannot use it, and then they would potentially have to rely on the services of one national wholesale provider for the network services they need in order to be able to use the NBN.
To put this differently, if NBN Co delivers such a basic infrastructure it is easy to understand that building a national retail network on top of that very basic structure would be an expensive business. We see this in other countries where there is often only one national retail player the simple reason for that is that no one else can afford to built a national retail layer on top of the basic infrastructure. All the trans-sector services mentioned above require a national approach, so all of these sectors would potentially have to rely on one wholesale player to establish their national networks for the delivery of their services (healthcare, etc).
Based on the strong views that NBN Co hold in relation to basic infrastructure the ‘retail clause’ is a neat solution – as I explained above, it is a way to ensure that the network can be used for these trans-sector services.
It is a very difficult concept and I would be more than happy to explain this further. Feel free to send me an email or grab the phone.
Paul Budde
Tagged in: Australia, Australia, New Zealand & South Pacific
