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Productivity Commission finds NBN anti-competitive

12 December, 2011
By Allison Orr

The Productivity Commission has released its investigation report into the competitiveness of the NBN Co.

The investigation resulted from three complaints by private companies that the NBN Co has gained a market advantage due to government ownership, and that policy decisions have given the NBN Co a commercial advantage.

The report finds that the government is not gaining unfair market advantage, but it does find that the returns generated by the NBN are so low that they do breach competition policy.  The report recommends that NBN Co comply with the Australian Government’s competitive neutrality policy, which says that Government-owned businesses shouldn’t be allowed to use its advantages to unfairly compete with the private sector.

Shadow Communications Minister, Malcolm Turnbull, says the report proves the NBN is anti-competitive and uncommercial.  He says, "the NBN Co has secured extraordinary concessions from competition law, freedom-of-information law and Government oversight.  Now the Productivity Commission has revealed it breaches competitive neutrality policy as well."

Communications Minister Stephen Conroy has rejected the report’s finding, saying that the NBN was never meant to generate a commercial sized profit, and if it did then the Government would have to increase prices for the NBN in rural areas.

Telecommunications analyst Paul Budde, said on ABC AM, and the Commission’s approach in the report was wrong, because the NBN should be considered not so much as a telecommunications network but as a piece of national infrastructure, like electricity, water or roads.

 

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