Rstuart,

"OPTUS has promised not to criticise the National Broadband Network in key regions for 15 years under a deal that raises new warnings the $36 billion project will stifle competition."

http://www.theaustralian.com.au/national-affairs/optus-signs-up-to-national-broadband-network-gag-order/story-fn59niix-1226130972922

I'm sorry, but everything I see points to the NBN stamping out all competition, and the future price rises it is asking for will deliver Australia the most costly internet access in the OECD.

@Shadow Minister: OPTUS has promised not to criticise the National Broadband Network in key regions

How much negative advertising can you recall seeing in the ISP arena? I can't recall any. So they have agreed to not do something they don't do anyway. And you paint this as some huge restraint on competition. It's nothing of a sort. At worst, this is another attempt from the Australian to beat up some minor mole hill into a mountain.

@Shadow Minister: everything I see points to the NBN stamping out all competition, future price rises it is asking for will deliver Australia the most costly internet access in the OECD.

We have just established there is no law banning competition. In fact its the reverse - the Labor government has just opened to competition in the local loop arena to an unprecedented degree. Anybody can now built local connects without regard to the USO, cherry picking the best, most densely populated areas and sell access at whatever price they like.

See how clever I am Shadow? I've got someone on the far right saying allowing competition will be a failure, leading to more expensive outcomes. I'll turn you into a bleeding heart socialist yet!

But yes, you are probably right in saying the NBN will eliminate all competition. As I keep saying, local delivery infrastructure - be it in electricity, water, roads or local loops do tend toward monopoly. Usually this is aided and abetted by government laws. But not this time. If the local loop remains a monopoly it will only be because $27 billion bet the government making in the NBN comes off, and the economies of scale do indeed mean the NBN delivers better broadband than anybody else.

In other words your assertion the NBN will lead to hugely expensive prices is pure poppycock. Labor has structured things so that if NBNCo gets too greedy it will be torn the shreds by private competition. It either delivers better broadband for Australia, or it fails.

Also Shadow you seem to want a private monopoly to provide you with your broadband connection. That is what you will end up with if the NBN doesn't go ahead. I don't understand that - it is the worst possible outcome. This post from iiNet's CEO provides the classic illustration of how a private monopoly behaves http://forums.whirlpool.net.au/forum-replies.cfm?t=1749774#r19 :

--quote--
iiNet has now signed a fibre schedule after a lengthy and difficult process with the incumbent. Our new customer plans are being finalised and we expect to commence the migration of our customers in the next few weeks.

The agreement is unsatisfactory and is signed with the knowledge that we have no choice, given Telstra's massive power and the option of "sign before we cut your customers off."

What we haven't been able to secure is like-for-like services. Telstra simply refuses to our request for equivalent services to those available over the regulated copper.

Instead of a state-of-the-art fibre to the home service being built, we have a fibre network that won't cater for products currently being delivered on 50 year old copper.
--end quote--

If you want the highest prices in the OECD, with the worst possible service, having a vertically integrated private company provide your single, only choice for fixed line broadband is the surest way to achieve it.

"We have just established there is no law banning competition", Actually I showed the anti cherry picking law did just that.

They cannot sell below the price they are charged by the NBN even if they could build and deliver the services far cheaper in the area they chose.

Considering that network access prices have steadily decreased in the past, and the NBN is as or more expensive than what we have presently and intending to increase the prices in real terms, we will be worse off in 10 years with the NBN than we are now.

"Also Shadow you seem to want a private monopoly to provide you with your broadband connection. That is what you will end up with if the NBN doesn't go ahead." No we won't. We will only have a monopoly in areas where it is uneconomical and state help is required. Otherwise there will be competition.

Besides a private monopoly is better than a state owned one. The private monopoly works to regulated prices and makes a profit from reducing costs, the state owned monopoly charges consumers at cost plus an arbitrary profit.

@Shadow Minister: They cannot sell below the price they are charged by the NBN even if they could build and deliver the services far cheaper

That's new. I can't see where the link you gave says that directly. But as it did sound plausible I've spent 3 hours searching. The journalists are bloody useless - they just copy off each other, so if the first one doesn't mention it none of the copy & pasters will. In the end I found the proposed bill: http://www.comlaw.gov.au/Details/C2011A00023/d13bd023-bde4-41cd-bfae-40342b83b9c5 I hate reading law. Did you know you would me drive to this? If so you are a cruel bastard Shadow.

In the amendment I can see where it says any competing networks must be wholesale, and must offer a similar interface to the NBN. But I see nothing about forcing them to charge the same as the NBN. I think someone made that bit up.

@Shadow Minister: the NBN is as or more expensive than what we have presently and intending to increase the prices in real terms

On the information we have so far both these assertions are false Shadow. We know it isn't more expensive for all ISP's that currently offer it. And to quote a link you provided earlier http://www.smh.com.au/technology/technology-news/nbn-push-for-rise-in-key-rates-flies-in-face-of-reduction-pledge-20110822-1j6ur.html :

"The cheapest broadband services would not be affected by the proposal because wholesale prices for the lowest-speed connections would be capped at $24 a month for the first five years of the network."

@Shadow Minister: state owned monopoly charges consumers at cost plus an arbitrary profit.

Do you have any evidence for this? When I compare public and private corporations in similar fields (eg Australia Post vs private couriers) I don't see it.

I'd be more inclined to believe you if you weren't so liberal with the truth. The first three assertions you made in this last post were plain wrong. From where I sit they look like bs dreamt up to support an ideological agenda - nothing more. Why on earth would I accept yet another unsupported assertion from you that happens to dovetail neatly with your ideology?

Rstuart,

"That's new. I can't see where the link you gave says that directly" - Because there isn't one.

If you are forced to offer similar prices to all customers incl those to whom your network does not directly cable, i.e. those to whom you have to buy the service from the NBN, it would be a bit of a truism that the discount you can offer to your own network would bankrupt you if you had to offer it to all and sundry.

An example of state owned gouging would be the comparison between Victoria's generation and NSW. Victoria sold off its generation, that now sells its power on the open market. The state owned generation sells it at a higher price to its guaranteed local market.

For all your spin I have yet to see anything that would indicate that prices would be lower under a state owned monopoly. A 5 year freeze on already uncompetitive lower end offering is little comfort in 10 years, when most of the network is rolled out.