The Australian Government chooses competition over regulation for FTTN

Tuesday, 15 May 2007

The Commonwealth Government hase decided to hold a competitive tender for the construction of the FTTN with rival consortiums bidding based on the price and quality commitments given in their Special Access Undertaking (SAU).  Once built, the FTTN is a natural monopoly, however, the tender process facilitates 'competition for the market' before the FTTN is built.  CEG's Jason Ockerby and Tom Hird have worked extensively with the G9 consortium in developing the economic aspects of a proposed Special Access Undertakings (SAU) to build and operate a Fibre to the Node (FTTN) telecommunications network.  The Government's decision is an important precedent for using competition 'for the market' instead of regulation to determine investment priorities in natural monopoly industries.