Economy to suffer from Telstra broadband 2:01pm 5.06.08

A report by the Centre for International Economics, commissioned by a group of Telstra competitors, says consumers and the economy will be $897 million worse off if Telstra builds a national fibre-to-the-node (FTTN) broadband network.

The Competitive Carriers’ Coalition, which counts Macquarie Telecom, iiNet and Primus Telecom as members, said Telstra’s targeted return on the investment was relatively high and “may be consistent with the abuse of market or monopoly power”.
 
Figures showed consumers would pay 15 percent more for broadband if the telco were allowed to build the network, leading to increased inflation and a reduction in national growth.
 
“The CIE Report supports the industry’s greatest concerns: if Telstra is allowed provide a monopoly high-speed broadband service it will have a significant negative impact on Australian consumers and the economy,” said David Forman, executive director of the Competitive Carriers’ Coalition.
 
Telstra spokesperson Jeremy Mitchell said the report was a distortion. “Telstra is interested in getting on the business of designing a 21st century broadband network for Australia rather than spending money on fanciful reports and laughable media stunts.”