Toughening Residential ADSL Markets......

John Linton

......now thats a unique scenario - end of life marketplaces getting saturated....must be a real and 'sudden' surprise to the brilliantly informed people providing internet and other services.

I read some of the submissions on whining about Telstra to the ACCC yesterday to see if there was any general information that could be gathered - there wasn't. I found TPG's submission of more interest than the others:

http://www.accc.gov.au/content/item.phtml?itemId=1028701&nodeId=b09d738f5016447f2a3d999591b4b494&fn=TPG%20-%20Public%20submission%2025%20January%202012.pdf

if only for what the figures they cared to include indicated about marketplaces in general and what sort of scenarios TPG may now be facing. You can read the quite brief report to make up your own mind as to what any of the comments/numbers may or may or may not mean but what they meant to me was that the people at TPG who compiled the response were either being mischievous or running such a tight 'misinformation agenda' they were being downright illogical.

By conforming to the line run by the few other ISP's submissions I bothered to read (Telstra must give 'unfettered' access via whatever infrastructure it possesses at the lowest possible price to every end user irrespective of where they are located) they make total fools of themselves and attempt to fight a 'battle' they, or any other ISP, hasn't any chance of winning....and, if you are a rational person, neither should they have any chance of 'winning'. I am no fan of Telstra's business practices (I think I may may have made the odd comment that would give that indication over the years) but I definitely see no requirement to allow competitors to build DSLAMs where it is easy to make money and then bitch about Telstra's practices where that isn't the case. I have no firm figures but I would think that having access to more than 80% of any market and being "excluded" from the 20% where you choose not to compete is hardly a draconian burden on any commercial enterprise.

However, I am sure the ACCC will produce some edict on what will happen and that will be that - from what I read in the various submissions nothing has been submitted of any insight or value. My understanding of the submissions is that the ISPs who made them are deeply concerned that they have already reached a point where not only are they no longer growing but that Telstra has taken back some percentage of their current ADSL customers and they are actually shrinking (in TPG's case this is not yet the situation but it appears to be approaching). The other point, based on observing ADSL pricing to the various ADSL marketplaces, is that the financial models operated by all the submitting ISPs are not working as well as the used to in a set of 'saturated' marketplaces. So - that's commercial life over the cycle....get used to it.....adapt or die.

Perhaps its the current state of nannyism in Australian society in general - always be looking for a 'government' hand out that now applies to commercial life as every other part of 'society'. Personally, I think trying to further 'regulate' ADSL in its post sunset years is as pointless as trying to get a better deck chair on the Titanic after 11.40 pm on 14th April 1912.....but maybe it's a sign of the increasing desperation among the remaining residential ADSL providers.

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