In a damning report recently conducted by the Centre for International Economics it was revealed that a Telstra built and managed National Broadband Network would burden the economy by lowering wages, increasing inflation, reducing national growth and raising broadband prices by 15% in which our nation would be $897 million worse off.
Telstra was quick to reply by dismissing the report as ‘bogus’ although Telstra Wholesale managing director ‘Kate McKenzie’ failed to note a crucial sentence in the report that read “However, obtaining precision is not the main objective of this analysis. The main point is to show that it is likely that a significant margin exists between Telstra’s required return from the FTTN network and the return that an alternative supplier would require for the same asset, and this margin will translate into hardship for the economy and the community.”
Report Conclusions:
- Australian consumers and the economy would be $897 million worse off under a Telstra owned and operated National Broadband Network;
- Telstra’s targeted return on its capital investment was relatively high and “may be consistent with the abuse of market or monopoly power”;
- The build-cost scenarios for Telstra’s broadband network would increase inflation, reduce national growth, lower wages and reduce national consumption;
- The impact of Telstra’s network would “lead to a general contraction of the Australian economy.”
source: itwire.com
