A Senate committee report on competition in high-speed Internet services has criticized the poor state of Australia’s broadband network.
The Senate Broadband Inquiry Report said the copper network is at the end of its life and the government had done little to ensure Australia had a state of the art broadband network.
The report agreed with the Australian Competition and Consumer Commission (ACCC), that Telstra Corp. Ltd.’s 50 per cent ownership of Foxtel impeded competition in telecommunications and broadband.
The report by the Labor-dominated committee found the government and ACCC should review regimes preventing anti-competitive conduct in the provision of broadband services due to the overwhelming market power of Telstra.
Australian Democrats Senator John Cherry, who chairs the committee, said the government should set, in consultation with industry, a 10-year national target for an optic fiber consumer access network.
He said countries such as South Korea have a state of the art network while the U.S. and U.K. have recently committed billions of dollars to broadband rollout.
“Australia cannot afford to be left behind; competition is being stifled because of Telstra’s ownership of the copper wire, optic fiber network and Foxtel,” he said.
The report recommended the Productivity Commission undertake a full examination of all the options for structural reform in Australian telecommunications, including structural separation of Telstra.
Telstra group managing director of regulatory, corporate and human relations, Bill Scales, said the report was seriously flawed and expressed disappointment at the lack of recommendations to improve customer service.
“Our ongoing campaign to make broadband more accessible to all Australians saw Telstra’s broadband customer numbers soar by 46 percent in just five months this year,” he said.
“Telstra has spent well in excess of A$1 billion (US$720 million) broadbanding Australia … in the last four years and as a result of a wide range of initiatives, expects to meet its target of one million customers well ahead of time.”
The recommendation for Telstra to divest its holding in Foxtel is in line with Labor policy and with Labor senators occupying three of the six seats on the inquiry, government senators John Tierney and Tsebin Tchen released a dissenting report.
“From the outset, the value of an inquiry into competition in broadband services was questionable,” the dissenting report said.
“The inquiry provided nothing more than a platform for yet another attempt by the Labor opposition to turn the clock back to a time characterized by excessive government control over a distorted telecommunications market.
