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Telecommunications - Written by Renai LeMay on Wednesday, October 12, 2011 9:39 - 23 Comments
NBN Co must own Telstra’s copper, says Hackett
news The outspoken managing director of national broadband provider Internode has called for ownership of Telstra’s copper to be transferred to NBN Co as part of its deal with the telco, arguing future Federal Governments may want to use the infrastructure to build hybrid fibre to the node networks.
Under the terms of NBN Co’s multi-billion deal with Telstra, which is shortly expected to be approved by Telstra shareholders at the company’s AGM, Telstra will progressively shut down its copper network over the next decade as the NBN is rolled out, and transfer its customers onto the replacement fibre network as it is built.
However, there is no guarantee that the Labor-backed NBN policy would go ahead under a Coalition Government, with Shadow Communications Minister Malcolm Turnbull having outlined the bones of an alternative policy which does not include the high levels of spending the Coalition has claimed the NBN entails. Current polling suggests the Coalition will easy win power at the next Federal Election in several years.
A number of major carriers overseas are currently deploying fibre to the node technology, which sees fibre laid from telephone exchanges to streetside cabinets rather than all the way to customers’ premises) as under the NBN. The extra distance is made up with the existing copper, with new VDSL technologies developed for this kind of network rollout offering fibre to the home-like speeds — although network latency is expected to remain slower than on pure fibre networks.
However, in a speech to the CommsDay Congress in Melbourne yesterday, according to speaking notes seen by Delimiter, Internode MD and CTO Simon Hackett said under the current arrangement, Telstra could not be compelled to cut its copper network up — which he said was the issue which had really sunk Labor’s previous failed FTTN NBN strategy.
“Telstra will not allow the copper to be cut unless they do the cutting on their own terms,” he said.
The Internode chief pointed out that an independent consultant’s report into Telstra’s NBN deal had found it benefited Telstra to the value of $4.7 billion to cooperate with the NBN policy. This, Hackett said, meant NBN Co was overpaying Telstra by $4.7 billion to get the NBN built. If he had his way, the executive said, he would demand that amount be turned into NBN Co “owning the copper that it is paying for”.
This would “protect the long-term interests of end users by allowing for a hybrid of FTTH and FTTN as a choice for any future Federal Government,” Hackett wrote.
In the meantime
The long-term interest of end users is a technical term in the context of Australia’s telecommunications industry. It refers to a decision-making process whereby the Australian Competition and Consumer Commission (ACCC) decides whether to allow or deny a certain approach in the market.
The regulator is currently examining the structural separation undertaking which Telstra recently filed with it, in order to decide whether it is appropriate for guiding the next decade in Australia’s telco sector, before the NBN is fully built. The ACCC has asked Telstra to make several key changes to the plan, with the regulator being particularly concerned about the telco’s commitment to providing the same services to its wholesale customers as it does its own retail arm.
Hackett said the SSU didn’t separate Telstra, didn’t protect competition, and enshrined “massive loopholes” in how the telco dealt with others. However, he said that following the shareholder vote on Telstra’s NBN deal, the telco’s board would have authorisation to proceed only with the SSU in its current form, stating that a SSU substantially changed in consultation with the ACCC would require “a new voting cycle”. This, he said, added up to blackmail — to force the ACCC into considering the current SSU’s merits against the long-term interests of users.
If Hackett had his way, he said, he would have the regulator set a bundle of wholesale copper line rental and ADSL2+ pricing for no higher than $33 a month — the same average price which NBN Co will charge per customer bundle on its fibre network.
In addition, Hackett reiterated his opposition to the ACCC’s decision to set the number of points of interconnect for other carriers to connect with the NBN at 121. The executive objects to the 121 PoI model for a number of reasons — ranging from the fact that it will raise overhead costs substantially, will be less reliable and will leave Telstra at an advantage compared with other ISPs, as it will own fibre to all PoI locations and owns the buildings (telephone exchanges) for most PoI sites).
These three issues (ownership of the copper network, Telstra’s SSU and the PoI debate) were the three “elephants in the room” for the NBN, Hackett said.
“The forecast for the NBN? Cloudy with a chance of hardball,” he added, describing the network as “the Nearly Begun Network”.
Image credit: Internode
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