Friday, August 26, 2011

Politics the Ergas way

I need to take more time to digest what is in the NBn Co SAU. But henry ergas has chimed in today with a contribution that implies the SAU guarantees increasing prices rather than merely an envelope that increases below which prices will remain.

The egregious part is the comment

That, of course, won't happen. Rather, the government has demonstrated its willingness to sacrifice every principle of sound public policy to get its way. It can, and likely would, try to direct the ACCC to accept the most offensive aspects of NBN Co's SAU.

He knows that the ACCC legislation specifies that the Minister CAN NOT direct the ACCC in the application of Part XIC of the (now) Competition and Consumer Act.

The most recent example was the NBN PoI decision where the Government and NBN Co both favoured the 5 PoI outcome but the ACCC selected the 121 PoI outcome.

He also errs in his accusation that the NBN Co's differential prices by speed differs from the flat rate pricing of the ULL. With ULL the customer buys the WHOLE pair (or in LSS all the above voice frequency). With NBN Co each premise has 100 Mbps of capacity which can be acquired by different providers. I can buy 4 12/1 services from different ISPs and have them delivered to the same NTU.

Better analysis is required on all sides of the NBN model. The false accusation of rising prices needs to be dismissed.

(Note: by the same token NBN Co should have figured that the price rise reference would result in these accusations, another example that they just haven't got their act together yet)

Novae Meridianae Demetae Dexter delenda est

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