NBN paying Optus to destroy infrastructure
The ACCC needs to think again on giving the green light to such a damaging deal.
THE Optus high-speed cable internet network is a national asset. Comprising 25,000 kilometres of coaxial cable strung across 550,000 poles in Sydney, Melbourne and Brisbane supported by 7000 kilometres of fibre, it provided Telstra with its first genuine competition, putting its own wires directly into half a million homes.
Telstra fought back with FoxTel, Optus got burnt and has probably never recovered the cost of stringing the cables. But from an economic point of view, what's important is that the asset exists. Its costs have been sunk. What Optus has now is an asset that costs relatively little to operate and can deliver peak download speeds of 100 megabits per second - far faster than anything on Telstra's copper wires.
Right now it has 496,000 customers. It is within connecting distance of another million, meaning that for very little cost Optus or a buyer of the network could provide a very fast, very cheap internet service to as many as 1.4 million households - far faster than ADSL.
Only a vandal would destroy such an asset. Only a seriously confused regulator would allow it happen.
NBN Co has asked the Australian Competition and Consumer Commission to let it pay Optus a reported $800 million to shut the network down. The only precedent for the destruction of infrastructure on such a massive scale is the $4 billion NBN Co is to pay Telstra to rip out its copper network, transfer its customers to the national broadband network and remove the internet from the cables it uses to deliver Foxtel.
The ACCC needs to think again on giving the green light to such a damaging deal.
THE Optus high-speed cable internet network is a national asset. Comprising 25,000 kilometres of coaxial cable strung across 550,000 poles in Sydney, Melbourne and Brisbane supported by 7000 kilometres of fibre, it provided Telstra with its first genuine competition, putting its own wires directly into half a million homes.
Telstra fought back with FoxTel, Optus got burnt and has probably never recovered the cost of stringing the cables. But from an economic point of view, what's important is that the asset exists. Its costs have been sunk. What Optus has now is an asset that costs relatively little to operate and can deliver peak download speeds of 100 megabits per second - far faster than anything on Telstra's copper wires.
Right now it has 496,000 customers. It is within connecting distance of another million, meaning that for very little cost Optus or a buyer of the network could provide a very fast, very cheap internet service to as many as 1.4 million households - far faster than ADSL.
NBN Co has asked the Australian Competition and Consumer Commission to let it pay Optus a reported $800 million to shut the network down. The only precedent for the destruction of infrastructure on such a massive scale is the $4 billion NBN Co is to pay Telstra to rip out its copper network, transfer its customers to the national broadband network and remove the internet from the cables it uses to deliver Foxtel.
