news National broadband providers iiNet and Internode have joined forces to escalate their ongoing complaints about Telstra’s fibre rollout project in South Brisbane, filing a joint submission with the competition regulator demanding that Telstra’s wholesale fibre services in the area be subject to regulation as the previous copper services were.
Telstra has chosen to replace the copper connections to about 20,000 premises in the region as its South Brisbane telephone exchange — where the copper cables terminate — is being closed in order to make way for the new Queensland Children’s Hospital in the area. The region is one of the first in Australia to receive fibre services to the home — but is not part of the Federal Government’s flagship National Broadband Network project, although the long-term plan is for the infrastructure to become part of the NBN.
The first customers recently went live on the network — including customers of ISPs who had gained wholesale access to the network.
iiNet has previously expressed its dissatisfaction with how Telstra is handling the switch for wholesale customers, with the company’s chief executive Michael Malone complaining in mid-August that Telstra wasn’t offering a multi-cast distribution option for IPTV, despite doing so on its copper network, for example.
In a joint submission to the Australian Competition and Consumer Commission published this week (PDF) filed by law firm Herbert Geer, news of which was first published by Communications Day, the two ISPs went further, arguing that wholesale fibre services in Australia should be included in the definition of what is known as a ‘Bitstream’ wholesale service, with particular reference to the “unacceptable” situation in South Brisbane.
The pair argue that the previous copper network was regulated, while Telstra’s new fibre network in South Brisbane is unregulated.
“As a matter of principle, it should follow that if a copper-based regulated service is unilaterally withdrawn due to the deployment of a fibre to the premises network, access seekers who were in recept of that regulated copper service should be entitled to receive a regulated fibre service as a replacement for the regulated copper service,” the two ISPs stated, labelling this as a “fundamental principle”.
However, the pair added, this fundamental principle was in danger in South Brisbane, as prior to the likely declaration of a regulated bitstream service by the ACCC, some ISPs will already be using unregulated Telstra wholesale fibre services in the region — and Telstra may not provide a migration path from its existing wholesale fibre services to any future declaration of an equivalent bitstream service.
The pair of ISPs noted that as part of the ACCC’s existing investigation into South Brisbane, it already had the information it required regarding the matter.
Telstra’s wholesale division has been invited to respond to the ISPs’ comments this morning. However, in its own submission to the ACCC (PDF), the telco argued for caution in declaring a regulated bitstream service, in the light of the NBN construction. The South Brisbane fibre rollout is eventually likely to be part of the NBN. Any ACCC bitstream declaration should await NBN Co’s own definition of fibre services, Telstra said.
Update: We’ve received the following statement from Telstra:
“As explained in our submission, our view is there’s no need for the ACCC to make a decision on the Layer 2 Bitstream service description now, as it would make sense to wait until NBN Co has properly developed its suite of NBN products, which will be highly relevant to the ACCC’s consideration.
We don’t see declaration of the Fibre Access Broadband product as necessary. It is a one-off unique situation and the prices we are offering for the FAB product allow wholesale customers to be competitive. We have also offered transitional assistance to ease the migration of wholesale services onto the fibre network. We have worked very hard to meet our customers’ needs in SBE and so far, 18 customers have signed up to FAB.”
Wow. What a bunfight. I can see arguments on both sides here. Of course, iiNet and Internode have a very valid point — replacing a regulated wholesale service with an unregulated one is not entirely fair, and there is some urgency to the South Brisbane issue. However, Telstra also has a point. In the long-term, this is all going to be a matter for the National Broadband Network, and the ACCC needs to take that into account as well.
To be honest, I wouldn’t be surprised if the ACCC took a tactical approach to South Brisbane, resolving the issues there while holding off a long-term decision on this one until NBN Co gets a bit more organised. Of course, for actual retail customers in South Brisbane, the issue may end up being moot anyway.
Are retail customers going to complain about the specific details of how they’re getting 100Mbps fibre to their house or business, as a replacement for copper? Not that likely ;)