Regulator rejects G9 plan for a broadband network

18 Dec 2007

The Optus-led G9 consortium has been sent back to the drawing board after Australia’s competition regulator rejected its plans for an AUD4 billion (USD3.44 billion) broadband network. In a draft decision that also has implications for Telstra’s proposals for a national fibre-optic network, the Australian Competition and Consumer Commission (ACCC) yesterday rejected G9’s plans because they lacked an ‘effective’ independent audit. The regulator was also concerned the consortium would give the owner of a network a ‘high degree of discretion’ in determining conditions for 15 years. This meant companies wanting access would ‘not know where they stood’.

Despite the rebuff the commission has generally accepted the consortium’s pricing and its intention to separate the owner of the network from other telecommunication companies. Market observers viewed the regulator’s comments on pricing as a veiled threat to Telstra that its intention to charge rivals up to AUD85 a month per line to access a network would be unpalatable. In its decision yesterday the commission said the G9’s prices for an initial three-year period of AUD29 to AUD50 a month – depending on the speed offered – might be within the ‘reasonable range of prices for this type of service and network’.

Australia, Optus