@Shadow Minister: 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.

That makes no sense whatsoever Shadow. Firstly, if someone is buying something from you at $X and reselling it to make a quid, then there is no reason you could not do the same thing. How do you think the industry works now? TPG, iiNet, Internode - they all rent the copper off Telstra. And they sell it cheaper to the end user that Telstra does.

Secondly, it is utterly beside the point. A new market has been created - the local loop. Everyone is free to enter it. What those people can do markets has nothing do with whether the local loop is an open market. I notice you don't whinge at the electricity markets being run in the same way, and in fact you seem to carefully avoid that fact that mechanism used to introduce competition into the electricity market was to break up the generation, retail and distribution in exactly the same way Labor is now doing with data communications.

Thirdly, as far as I am aware structural separation of the industry into local loop providers and retailers is coalition policy as well. This is certainly their plans for Telstra. Are you claiming they are banning competition?

@Shadow Minister: The state owned generation sells it at a higher price to its guaranteed local market.

Do you a reference for this? I've heard claims on the ABC to the contrary. Don't feel bad - I didn't believe them either. It would be nice to get some authoritative information.

Anyway you've elected a liberal government now, so I presume this will change?

@Shadow Minister: For all your spin I have yet to see anything that would indicate that prices would be lower under a state owned monopoly.

I don't think they would be lower Shadow. If you recall the way Telstra's wholesale prices are set are identical to what you are decrying. Telstra hire a floor of lawyers to convince the ACMA their costs are as high as possible, and then ACMA then sets the wholesale price at cost plus a margin. That is pretty much what you are telling me happens with a government monopoly - cost plus. The only difference is the process of determining the cost is more efficient with a government monopoly, as there aren't phalanxes of lawyers involved. And of course Telstra is free to gouge on things not envisaged when the regulation was drawn up, which is exactly what they are doing in the South Brisbane fibre rollout.

You are forgetting the big picture. We aren't building the NBN to lower the costs. We are building the NBN because the private monopoly won't upgrade the network. If all we were trying to do it was introduce competition into the market the NBN wouldn't be needed - just structural separation of Telstra.

" The only difference is the process of determining the cost is more efficient with a government monopoly,"

Absolute rubbish. The costs on both cases are audited. The government monopoly has no incentive to reduce costs. The case of power generation I gave you is a prime example, of how the power stations in the La Trobe valley were making a loss under government ownership and were making a profit under private ownership whilst selling their power at the same real cost.

If the NBN was a simple upgrade, then why the need to remove the old networks, some of which are relatively new and fast?

@Shadow Minister: Absolute rubbish. The costs on both cases are audited.

Are you just making this up as you go along Shadow? I ask because you have returned to your usual habit of making assertions without providing references. When you do that and the assertion aligns with your politics, going on past performance I'd say it has a 50/50% of being pure bs, albeit perhaps not your original bs but something repeated from right wing blogs.

Just to be clear I have provided references saying Telstra hires floors of lawyers to make its case, and I have provided a quote from Malcolm Turnbull saying the relationship between the ACCC and Telstra is nothing short of trench warfare. Clearly this is not an efficient way of doing things, yet here you are claiming that there is no more efficient way for two parties to interact. That sounds like absolute rubbish to me.

@Shadow Minister: The case of power generation I gave you is a prime example

Again, you made those assertions without supporting references. I did ask for them because to put it bluntly without those references I be a fool to believe you. This is not unreasonable. I expect to be treated in the same way, which is why I do give references. Without references the conversation reduces to two people yelling lies at each other. Some may find that entertaining. I don't. I come here to learn.

@Shadow Minister: If the NBN was a simple upgrade, then why the need to remove the old networks

We've been over and over this. Because a private company owns the existing network and it refuses to upgrade it, the only way to upgrade it is to replace it. But the only hope NBN has building a new network for roughly the cost of what we are paying now is if everyone uses it. The way to force that is to decommission the network being replaced.

Rstuart,

Now you're are getting nasty. Compared to the BS you have served up, such as it being more efficient to estimate costs with a government organisation. Where are your links?

All companies books are audited, so I didn't consider that I needed a link for this. The negotiation for regulated rates are hotly contested as they directly affect profits, and there are plenty of non tangibles that can be debated, such as renewal and capital costs, for state owned companies, there is no negotiation, as the costs are passed directly to the consumer with little scrutiny. Easier, but in no way more efficient.

As for Hazelwood, I was doing a masters in Reliability maintenance, and did a study on Hazelwood personally going to the site. In 1995 the plant was losing money hand over fist, was scheduled to be closed in 2005, and employed directly about 1200 people and had an availability of about 75%. The plant now employs about 540 and has an availability of about 85%, and is making a profit. While there are no article directly on this on the net, any search will show that there were massive job losses following privatisation, with and increase in output, which shows massive efficiency gains.

As for your throw away line "Because a private company owns the existing network and it refuses to upgrade it, the only way to upgrade it is to replace it." That is pure drivel. There are plenty of high speed connections, and even if a FO line is run, there is no need to remove the existing line.

The plant I am building has high speed FO lines, and I am forced to pull in copper lines for the fire and other emergency systems, as FO is not considered sufficiently reliable in the case of power failures.

Rstuart,

More food for thought.

http://www.theaustralian.com.au/national-affairs/rudd-guru-slams-nbn-monopoly-as-deal-will-harm-consumers/story-fn59niix-1226137347106