If iiNet’s shareholders accept the TPG offer and the ACCC approves this take-over (neither of which is certain), the prospect of vigorous retail competition in the fixed network is dim. The extent of price competition currently is debateable and increased industry concentration is irrefutable.
To read this column, click Economuse 2015-04-01
The next column will examine how the competitive process can still be strengthened, with or without this merger.
Two current consultations by the ACCC show a marked difference in the regulator’s treatment of the legacy (Telstra) access network and its treatment of the new broadband network being built by NBN Co.
Both Telstra and NBN Co. are subject to the building block method for calculating allowable revenues (wholesale only in the case of NBN Co.). But in application, the ACCC continues to hammer Telstra while mollycoddling NBN Co.
The ACCC hopes that keeping Telstra’s access prices low will be good for competition and end users. It may be wrong (see reference in the attached to “price competition has stalled”) and it is short sighted. The real issue is the long term affordability of broadband which has been compromised by the regulator’s unusual assent to deferred revenue increases at NBN Co.
The article can be found by clicking Economuse 2015-03-12
On Thursday, 26 February the FCC voted on a new policy for ensuring net neutrality. This article was written before that decision was published but, with just two dissenting Commissioners, the FCC adopted the President’s plan as described in the article – which you can by clicking Economuse 2015-02-24
At the same meeting used Section 706 of the Telecommunications Act to over-ride legislation in two states (but others will follow) that stopped broadband competition from public corporations. The dilemma was examined in a major thought piece two years ago which compared case that the FCC has just looked at with the NBN in Australia as originally set-up – using guidelines that are used in Europe to balance private and public investment in broadband – you can see this paper by clicking SNG White Paper on State Aid, October 2012
The ACCC is considering whether to allow a joint venture between Foxtel and the Seven Network because of Foxtel’s current dominance of the pay TV market in Australia. But, it knows that the elephant in the room is Netflix which launches in Australia in March.
The subscription video on demand (SVOD) market is crowded. There will be a bloody (shareholder red ink) battle which will leave only the biggest players.
This opinion piece looks at the implications for regulation, existing content providers and the carriers in Australia. Click
The current (Aug 2012) NBN business plan is a fantasy and we must now assume a legislated monopoly will not hold.
The new carrier licence condition that will apply in January may close the loophole in legislation that TPG exploited. But TPG has a Plan B that uses wireless spectrum and cannot be stopped so easily.
The real issue for the NBN is that mobile is rapidly becoming the de-facto standard for broadband access. It is already competitive with the NBN for downloads up to 15 GB per month.
These issues and some ideas for dealing with them are explored in Act now – or the NBN will be a white elephant