And here is the link. I might be on a lot of ignored list as well I supposed.

https://www.theaustralian.com.au/business/opinion/non-compete-clause-exposes-flaws-of-nbn/news-story/728b865fcc172430a4877ae6f1e9a9cd

Non-compete clause exposes flaws of NBN

• By TERRY MCCRANN
• THEAUSTRALIAN
• 1:00AM JUNE 25, 2011

THE entire basis of the National Broadband Network has been exposed as fundamentally unsound by the "wireless non-compete" clause in the deal between NBN Co and Telstra.

At its simplest, it's a clause that is completely unacceptable and arguably illegal. What would be, what was, objectionable with cardboard boxes should also be so with broadband services.

Broadly, but simply and accurately, NBN Co and Telstra agree not to compete. Worse, NBN Co is actually paying Telstra for that agreement.

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Indeed the Communications Minister himself no less, Stephen Conroy, all but put it in exactly those terms on Melbourne's MTR radio yesterday.

He explained, indeed justified, the non-compete clause as being a "perfectly sensible corporate decision". "A commercial arrangement." That Telstra agreed not to "take NBN Co's money and sledge (the) NBN".

Conroy was all but saying that NBN Co was paying Telstra not to compete with it.

Indeed. Where was Conroy when the late Dick Pratt needed him to explain that his Vizy group had a "perfectly sensible commercial arrangement" with Amcor for each not to "promote" their boxes as a "substitute" for the other's?

The relevant clause in the deal is that Telstra can't promote "wireless services as a substitute for fibre-based services for 20 years". But it otherwise remained free to compete in the market for the supply of wireless services.

Telstra explains this clause by saying that it can't put flyers in letterboxes saying buy our wireless broadband instead of NBN Co's fixed broadband. But we're perfectly free to put flyers in letterboxes saying buy our wonderful wireless broadband that can do all these wonderful things.

And that further, it didn't see the clause -- insisted on by NBN Co -- as limiting in the slightest its ability to sell wireless. Except and absolutely crucially, that's wireless against wireless. Not against fixed.

Two points. Except of course it does limit its ability to sell wireless. And does so for 20 years. An awful lot of technology can be invented and developed in that timeframe.

Right now Telstra might not want to sell wireless broadband instead of fixed fibre. But in 10 years?

The second point is exactly that. Telstra doesn't want to sell wireless instead of fixed broadband in the new world of the NBN. It wants to sell wireless and fixed together, in a package.

Why? Because it sees the NBN as finally freeing it to use its market dominance across the telco space in a way that it has been limited in doing under the existing competitive regulation.

Given that the NBN is coming at it whether it likes it or not, it's perfectly happy to share monopolies, so to speak, with it. Rather than competing head to head with the NBN -- my wireless network against your fixed fibre network.

The combination of the fact that Telstra already has a pervasive national wireless network that really could compete head to head with the NBN in its slow 10-year build-out phase, and our increasing desire for mobile broadband, makes this anti-compete clause vital to NBN Co.

The promoters of the NBN keep saying that wireless just can't compete with fixed fibre, because of the immutable laws of physics and the way they play out with spectrum.

That only fibre can give the sustained guaranteed speed; that wireless degrades quickly depending how far you move from the base station and how many are hooked up and what they are downloading.

That's all true. At least it is, right now. But in 10 or even five years' time? The science of physics might be "settled". But the technology of data compression might not be.

But in any event, it's not the science of physics which is in play here. But the science of arithmetic and the social science of choice. Both go to the fundamental unsoundness of the fixed NBN.

What NBN Co and its CEO Mike Quigley are afraid of is what might be termed the Inverted (Kevin) Costner Effect. Build it, the NBN (at a cost of $40 billion going on $50bn and then they don't come.

That huge spend requires NBN Co to set a certain minimum figure for wholesale access to the NBN. You then have to add the retail margin and costs.

It does not want the other elephant in the telco space, and the one with not only a huge existing cashflow but up to $11bn of its money, offering a pervasive and cheaper wireless alternative.

Yes, it might not be a sustained warp-speed 100Mbps. But it might be a 4-20Mbps that is all most of the people want most of the time. Quigley doesn't want to spend $50bn and then find out. He doesn't want you to find out.

The fact that Telstra itself seems perfectly happy not to go down that path is hardly a cause for endorsement of the non-compete clause. It suggests that Telstra sees more upside in building a packaged mobile-fixed dominance.

That's to stress, more upside for Telstra profit. Which means one or both of: Telstra being able to migrate its market power to the 21st century world of the NBN, or the consumers of broadband services in the future collectively paying more than they would with real infrastructure-based competition as well as simply retail.

As Henry Ergas pointed out yesterday, this is central to the deal and the whole NBN concept. Agreeing non-compete with wireless and shutting down Telstra's and Optus's HFC cables.

At core it highlights the two great flaws of the NBN. That we have a government (and an enthusiast in Quigley) mandating a technology and a service -- fixed fibre to a fixed location -- as the broadband for Australia for the next 20 to 40 years.

I wish I could be as confident as Conroy and Quigley, and in a different context Ross Garnaut, about knowing that far into the future.

Secondly, the $50bn has to be serviced. By definition that means paying more for broadband in the future, than if you didn't spend it.

By further definition, alternatives could deliver broadband cheaper. So you have to ban them.

So consumers will pay more than they would otherwise. It is entirely rational for Telstra to aim at its biggest possible slice of that.