Web DevelopmentA coalition of broadband carriers, many who are financially struggling and individually have a very small share of the Australian broadband market have now resorted to desperate moves in an effort to get attention claims Telstra. Among them are AAPT, Adam Internet, Austar, and iiNet, Internode, Macquarie Telecom, Optus, Primus Telecom, Telarus, TransACT, Unwired and Westnet.
The group who have formed the Competitive Carriers Coalition (CCC) have produced a report which claims that consumers would pay 15 per cent more or about $897 million a year for broadband services if the big telco wins the rights to build and manage a national fibre to the node network.
The report was “bogus” and “a sham”, declared Kate McKenzie, Telstra’s Wholesale group MD. Other Telstra executives have said that the report is also riddled with mistakes and has only been produced to draw attention away from the weaknesses of the Coalition bid.
The $897 million claim was published by the Competitive Carriers Coalition (CCC), quoting a report it commissioned from the Centre for International Economics (CIE). It said the increased cost is due to Telstra’s targeted return of 18 percent on its capital investment.
According to the report’s authors, the rate of return Telstra has publicly said it would demand is relatively high and “may be consistent with the abuse of market or monopoly power”.
The CIE report says its $897 million forecast is based on Telstra’s initial estimate that the network would cost about $9 billion to build. If Telstra maintained its plan to seek protection on broadband prices for 14 years, it would extract $12.6 billion from Australian consumers, the report estimated.
CEO Sol Trujillo has since said the NBN could cost as much as $15 billion.
The report says that if this were the case, Australians would pay an additional $1.4 billion a year for broadband services.
David Forman, CCC executive director, yesterday said: “The additional 15 per cent cost consumers would face under Telstra’s FTTN model is equivalent to charging a private ‘Telstra tax’ on broadband services.
“The difference between such a private tax and a normal government tax is that it all flows to Telstra. As a nation we cannot afford to let Telstra recreate another monopoly.”
Kate McKenzie said the report was a sham. “I guess if you pay somebody to say what you want them to say, they say it,” she told ABC radio news. ” I don’t know how they can possibly make such an assertion, because not only do we not know exactly what network’s going to be built, we don’t know what cost it is.
“This is a completely bogus report that has been bought and paid for by a bunch of competitors who want one thing only to stop the building of Australia’s national broadband network and keep their current cosy arrangements.
“We don’t know what price we’re going to charge and presumably, they don’t know those things either.”