Looking for upside as AAPT exits from National Broadband consortium

Stuart Corner
Friday, 17 October 2008 05:31

Opinion and Analysis

AAPT has dealt a serious blow to Terria's credibility and to its chances of winning the Australian Government's National Broadband Network contract, but maybe there is an upside.

It's been a bad week for Terria. Just two days after CEO Michael Simmons told an investment conference that the global financial crisis would impact the organisation's plans to fund its bid - something which they would no doubt have already guessed - Telecom New Zealand subsidiary AAPT, the consortium's second largest member after Optus, announced its decision to pull out.

In a prime example of obfuscatory spin the company issued a statement headed "AAPT takes independent position on NBN bid"

In it CEO Paul Broad said: "The decision to cease our involvement in Terria is timely for us, given the current position of the bidding process...Moving out of the 'them and us' argument between Telstra and Terria allows AAPT to continue to share its views and maintain an independent perspective as the process unfolds,"

He described the move as " timely for us, given the current position of the bidding process," and he added: "We believe the conversation must distinguish between two key issues. Firstly, who is best placed to build the network and secondly, a commitment to ensuring the correct regulatory model is in place to encourage competition on the network. The ownership of the network is of secondary importance.
 
"Let's not lose sight of the fact we're campaigning for a better outcome for Australians – consumers need a voice. A competitive environment is the only way to achieve this,"

Reading between the lines he seems to be admitting: that Telstra is best placed to build the NBN; that it may be the only organisation able to do so; that  AAPT is best directing its energies to ensuring that the Government gets Telstra to build the NBN on the Government's terms, not on Telstra's.

This could well mean some form of structural separation of the new network from Telstra and,  I believe, would be the best outcome of all. And the less there is any real competition to build the NBN the less the government wil be able to abdicate responsibility for making significant regulatory change.
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