Actually,

The ownership is not just changing. Presently we have both Optus and Telstra with lines / cable, and none of them have competition banned.

http://www.theaustralian.com.au/news/opinion/the-gouge-is-on-for-nbn-users/story-e6frg6zo-1226122392946

"WHEN Ralph Willis announced his telecommunications reforms in 1989, he delivered immediate price reductions and a price cap under which prices would fall steadily in real terms. Willis's reforms ushered in a long period of productivity increases that allowed price declines up to the present day.

In contrast, it is now clear this government's national broadband network will involve a huge slug to consumers. Indeed, Australia will become the only advanced economy where telecommunications prices rise steadily over time."

@Shadow Minister: none of them have competition banned.

Are you sure it is banned? My understanding is they just came to non-compete agreement with Telstra and Optus. There is no law saying you can't put in new local loop's. It is continues to be (as it was back then) economically impossible to do so, which is why no one (not even Optus) did it.

@Shadow Minister: Ralph Willis announced his telecommunications reforms in 1989,

You know why Willis could say such a thing, don't you? Because back in 1989, the government owned Telstra. This is actually a counter example to your claim that government owned monopolies always drive the prices up.

You might want to contrast that to what Telstra did last month. Surprise, surprise, a private monopoly raises the prices it copper land lines. There is no justification for it - it isn't like they are trying to fund a upgrading of the copper network as after all the NBN is coming. They are pushing up the price because they are a monopoly, so they can. Private monopolies gouge every last cent out of the customer - because by law that is the duty the directors of a private company own to their shareholders:

http://www.brisbanetimes.com.au/business/phone-bills-to-rise-as-telstra-ups-line-rental-fees-20110724-1hvgn.html

I detest monopolies as much as you do Shadow, but the sad fact is that some things naturally tend towards monopoly. Sometimes clever financial engineering can create a market. That is what the Feberal Libs did with water, and the predominately Labor states did with electricity - much to their credit. Can you see how break up the current land line monopoly? I can't. Maybe some clever economist will figure something out. But I am sure of one thing - while it remains in private hands, it is impossible to weave any financial magic. To do so would stomp all over the property rights of the Telstra Shareholders.

Rstuart,

There is a law stopping people putting in local loops. The new laws prevent people cherry picking profitable areas by making it a requirement to provide connections to everyone in Australia or no one.

There may be natural monopolies, this is not one.

@Shadow Minister: The new laws prevent people cherry picking profitable areas by making it a requirement to provide connections to everyone in Australia or no one.

Do you mean new as in recent? Optus offered voice over their HFC network for a while. The quality was by all reports dreadful, so they dropped it.

Still the existence of a law doesn't alter the outcome much. Real competition in Australia has happened with fixed line precisely once: when Telstra and Optus and rolled out HFC down the same streets. Antiseptic said earlier Optus ended up turning off large chunks of their network (which was news to me - but he was involved in the rollout). Telstra ended up getting the law changed, so they could show ads on what was supposed to be an ad free medium. The government agreed because they could not survive any other way.

Doing that was a commercial insanity. I doubt it has happened anywhere else, and I doubt it will happen again. Most private organisations would have and worked out how to carve up the customer base between them, so they each had exclusive access to a given household, allowing their prices to be constrained only by the customers ability to pay. There was no needed to break the law in any obvious way - just start in different areas and avoid putting up cable where there already was some.

Doing anything else was a complete failure of common sense. But that is rare, as common sense usually does prevail. That is why land lines are natural monopolies.

I imagine local electricity poles and wires suffer from the same fate. We handle it in the same way, don't we? Some government quango owns the local infrastructure were there isn't competition, and we introduce private enterprise as soon as competition becomes possible - ie in the long distance transmission, generation, and retailing.

Rstuart,

If it is not necessary to ban it, then why do it? You are grasping at straws. As I said, if it wasn't necessary to ban competition, I would back the NBN.

All the signs are that the project is costing more than anticipated, and the returns are lower than anticipated. The profits will be guaranteed by gouging the customers that cannot go anywhere else.

@Shadow Minister: If it is not necessary to ban it, then why do it?

Are you claiming competition was banned to build the NBN? As far as I know it wasn't. Nothing has changed. Whatever the status quo was - it remains.

This is in many ways simply a commercial transaction that happens to involve the government. The government didn't change the laws in the way you are suggesting to make it happen. Telstra has obsolete technology. A new, very well funded competitor has come along - one with enough money to build an entire new network using shiny new technology that will render Telstra's network obsolete. Telstra and Optus, seeing the inevitable, sold their customers to the newcomer. That is what happened to the competition. There was none before, and there will be none now as the existing monopoly is simply changing hands. Nothing was "banned" by government fiat.

That is a simplification, as the government did change some laws. But those changes were in Telstra favour - they relieved it of its Universal Service Obligation.

I know you love the "Labor party nationalises the world narrative". Forget it - that isn't what is happening here. In fact both sides of the political divide would apparently have preferred to getting private enterprise to build the network, as that is what both tried first. The NBN route was taken only when that route failed.

@Shadow Minister: All the signs are that the project is costing more than anticipated, and the returns are lower than anticipated.

There are signs? As in something you saw you morning tea leaves perhaps? If you have something more substantial cite your sources, otherwise give it a break. Only you and I are here Shadow, and I am can assure you not interested in your speculation.