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NBN 'anti-competitive', economists warn

Key aspects of the National Broadband Network's business case are anti-competitive and risk "moving Australia back", economists have warned

Key aspects of the National Broadband Network's (NBN) business case are anti-competitive and risk "moving Australia back", economists have warned.

Joshua Gans, who in 2008 attended the then prime minister's 2020 summit to discuss productivity, has criticised plans to subsidise the rural NBN rollout through the prices that urban consumers pay, The Australian reported.

This cross-subsidy means that regional areas will pay the same access prices as people in the city.

Professor Gans warns that the subsidy "will lead to significant consumer harm lasting for 20 years or more".

The comments are part of a submission made by by Professor Gans, a former University of Melbourne professor who is now at the University of Toronto, and US-based economist Jerry Hausman, which was sent to Australia's competition watchdog the ACCC this week, the newspaper reported.

The submission warns that the key agreements between Telstra, the government and the NBN "are likely to be massively anti-competitive".

"Microeconomic reform has moved us away from this type of inefficient financing of government objectives," the pair write.

"This proposal would move Australia back."

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: ACCC, etwork, Telstra, University of Melbourne, University of Melbourne

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