NBN bidders agree on fibre monopoly

Network to adopt utility model.

Simmons agreed with comments by Ovum director David Kennedy that government policy over the next six months will tip the NBN into either a utility or competitive model.

He dismissed claims by a UBS analyst, who requested anonymity, that access prices for the Unbundled Local Loop (ULL) should be set by infrastructure costs.

"I am always intrigued by semi-academics who go back to the price of digging holes, and doing a spot price for copper because infrastructure has been paid for three or four times over. It is absolutely a sunk cost," Broad said.

Speaking at the Broadband Australia 2008 conference in Sydney, Telstra spokesman Jeremy Mitchell said adequate return on investment is crucial to avoid "another Cross City Tunnel". The tunnel runs under the streets of Sydney and has been largely shunned by motorists because of its high cost.

Speaking in a separate article, local analyst Paul Budde said the NBN should be costed similarly to other utility markets.

"If you look at telecommunications as a national interest, you have to price the infrastructure as you do other utilities like gas, water and electricity," Budde said.

"The ROI that Telstra wants is twice as much as it has [which] is why in many situations our access price is twice as high as in other parts of the world."

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