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Limiting Public Funding to Access Gaps

Getting Regulation Right Blog Aspect
Dr Archana Gulati
Published Dec 19, 2013
Updated Sep 03, 2023
It is reported that the fact Sing Tel Optus has plans to roll out fibre to the  “basements of apartment buildings and shopping complexes [ and use] [t]he existing copper wiring within the buildings .. to deliver faster, NBN-like broadband speeds is being seen as a threat to NBN‘s viability. There are apparently other operators with similar plans too.
My question is why should the Government sponsor/fund NBN like roll outs in cities where markets may (and will) serve customers? Why should NBN’s business model have factored in markets where competition cannot be ruled out?
It has been stated that,
Breaking NBN Co’s business model could force it to be reclassified from a profitable investment to a multibillion-dollar expense on the federal budget… NBN Co’s entire business model ran on the assumption of a flat national price for all customers. Labor’s NBN was designed to act as a cross-subsidy system where the higher revenues generated by city users paid for broadband in the bush.
This business model was discarded with the onset of  competition in  erstwhile monopolistic and fixed line based telecoms markets across the world. I have written earlier about the flawed and “Back to the Future” feel of ambitious National Broadband Plans based on incumbent centric National Broadband Networks.
Again there are lessons for India’s NOFN which is basing its arguments of veering way from its original mandate of strictly (actual access) gap filling based on similar fallacious business viability models.