Opposition would cancel Telstra deal


The Opposition has slammed NBN Co’s $11 billion deal with Telstra announced this afternoon, describing it as Labor’s “desperate” attempt to progress its National Broadband Network policy “by throwing billions of dollars of taxpayers’ cash at it”, and adding that it would cancel the deal if elected.

This afternoon Telstra revealed it had signed a preliminary $11 billion deal with NBN Co that would see the telco migrate its telephone and broadband customers onto the fibre National Broadband Network, with its copper (ADSL) network to be shut down and no more broadband services to be provided over its HFC cable network.

“Today’s announcement is designed to mask the fact that after almost three years, [Prime Minister] Mr Rudd has failed to deliver a single new connection under the guide of an NBN,” a statement issued by the Opposition tonight – from the offices of Shadow Communications Minister Tony Smith and Shadow Finance Minister Andrew Robb – said.

“Clearly, because the Coalition does not support Labor’s reckless NBN, we would not proceed with this arrangement if elected.”

“What value are taxpayers getting for the $9 billion which is to be handed over to Telstra?” the statement asked. “Labor claims this is justified to reduce the cost to taxpayers of building the NBN – but this hugely expensive and risky venture is something that no responsible government would contemplate in the first place.

The Opposition said it did not believe it was the role of government to force taxpayers to spend billions of dollars to build and/or buy businesses in areas where the private sector was able to perform the role.

The statement also pointed out that the Telstra deal was conditional on a range of requirements being met, as well as shareholder approval. “It is clear that if any agreement is to be reached, it will not be finalised for many months, well after the Federal election,” the statement said.

“Prior to the next election the Coalition will outline a responsible alternative policy to deliver fast, reliable and affordable broadband,” the statement said. “Our policy will be responsible and deliverable.”

Image credit: Office of Tony Smith


  1. “Today’s announcement is designed to mask the fact that after almost three years, [Prime Minister] Rudd has failed to deliver a single new connection under the guide of an NBN.”

    Well, it’s nice to know that the Shadow Communications Minister has a firm grasp of reality, and the possibility for a massive infrastructure project like this delivering on-the-ground results — live connections! — fewer than three years since this Government was elected.

    Remind me, which planet does Tony Smith represent in Parliament?

    • I don’t disagree with a lot of what Tony Smith says … it’s fact that the NBN has not yet delivered a single broadband connection. However, there is broad public approval for the NBN policy, and I have yet to see a realistic alternative from the Opposition. Waiting until the election before unveiling a policy isn’t good enough … not when Labor is making so much political capital from the NBN now.

    • What about high speed rail? Europe, Korea, Japan, China have it and now California and England are building it!

      • Would you trust our Federal Government to build a high-speed rail network?? I certainly wouldn’t trust the NSW State Government or Victorian Government on that … they have screwed up public transport projects coming out the wazoo.

        • Obviously they would pay Leighton Holdings or Bruno Grollo to build it and some experts to design the path/alignment.

          Now Australia will be a country with the fastest broadband and no electric trains connecting its 2 major cities, let alone 350km/h ones. Great!

  2. Sounds like a stunt, but if its true it is waste on an unprecdented scale. Think about it – Telstra gets $11 billion, for what exactly? And who pays for it? All of us will because NBN Co. will be a monopoly and will pass the Telstra payment on in its own prices. Btw if you are a low bandwidth user who is quite happy with your adsl service now, too bad coz you will be paying much more in future. A policy disaster.

    • Telstra gets $11 bilion to shut down its ADSL network and move customers onto the NBN. And you’re right, it will be the Australian taxpayer paying for this. This $11bn deal, to my mind, makes it ever more unlikely that the NBN will ever achieve a commercial return. There is just way too much money going into this. I don’t doubt that fibre broadband will help Australia’s economy … but I do doubt that it will help it to the tune of $54 billion.

      Personally I don’t see what’s wrong with having two competing wholesale networks — fibre and copper. Let the customer choose (when I say customer, I mean ISP as well as end user).

      • It isn’t $54 billion. The NBN implementation study (which is where the $43 billion figure is from) is based on using NONE of Telstra’s infrastructure. The $9 billion worth of ducts and backhaul they are purchasing from Telstra will reduce the $43 billion figure by some amount. Not enough detail yet to know how much but substantial.

        • I think to know this for sure we would have to go back and read the bajillion page NBN Implementation Study. However I will cede your point to a certain degree. Maybe the NBN won’t cost $54 billion. Maybe it will now cost only $50 billion. Give or take a few hundred million.

  3. OK: let’s see his alternative vision then, long before the election. As someone who in work is actually affected by Labor’s policies in ways that the Liberals’ WorkChoices simply was unable to, I feel worse about this government than I ever did about the Howard era. Equally though the NBN is genuinely a step forward, and from a technical perspective much better than either FTTN or the OPEL proposals of their time.

    I agree in principle that – having privatised Telstra – nationalising network infrastructure seems daft, and with that in mind it entirely makes sense that the opposition would oppose this plan. With that in mind, I’m all for an alternative, but I’m not going to take “no, we don’t like it” as a valid alternative.

      • Yeah I pretty much agree with this, Iain. Despite the fact that the Opposition has made a number of valid points about the NBN being a risky venture and putting Australia into debt, it’s the only real plan we have at this point in time and we’re committed to it.

        I really don’t anticipate that Kevin Rudd will lose the next election, so I guess we had better settle in an see where this NBN thing leads us.

  4. What is this grand plan of the Liberals that will deliver affordable next generation broadband to the country I wonder? Do they actually understand the NBN will be used for more than Grandma’s 3mbps connection? This is about delivering a next generation infrastructure capable of handling millions of HDTV services on demand. IPTV is the future, alongside a range of commercial applications and business models we can’t even imagine yet.

    Does Tony Smith genuinely believe this can be achieved through copper and wireless alone? There’s already limited spectrum for this, and while technologies like LTE will deliver fast mobile broadband, we will always need a low latency mega-bandwidth network as the backbone of telecommunications in this country. Copper is obviously dead, so something has to take it’s place.

    Even Tony Smith with his Luddite attitude and limited understanding of IT would not genuinely believe we don’t need the NBN. This is all about grabbing votes by trying to pain the Government as reckless spenders.

    As far as cost effectiveness of the NBN, any estimates of return now are completely premature and utter BS. It’ll take decades before we can grasp the real value of the NBN. Countless business and education opportunities will grow from it. To not grasp that means you are either biased or backward with your thinking.

    Stephen Conroy is an idiot, but occasionally he delivers the goods. This is undeniably one of those occasions.

  5. I believe Smith and Co are putting together a fairly substantial broadband policy now, but I think he had better have some pretty good advisors, given that he has demonstrated close to nil understanding of the situation and technology in general. Given that most of the telecommunications industry has already hitched itself to Conroy’s Corolla, I think it unlikely that Smith has anyone helping him out on this one.

    One thing I would disagree with you here, though, Simon. Copper is clearly not “dead” as a technology.

    It is a truism that millions of Australians (indeed, the bulk of us on broadband) rely on copper cable to deliver ADSL broadband to homes throughout the nation. The same can be said of any nation throughout Europe, the Americas, Asia and so on.

    Copper is not the best broadband medium. Nor is it the one in which the world will be relying on in 20-30 years’ time.

    But it is clearly not dead today and will not be for some time. A fact I am sure will be driven home to you as you continue to use your no-doubt copper ADSL2+ connection for the next five years until the NBN fibre reaches your house and mine ;)

    • That’s just me being vague and unclear with my comments as usual :) When referring to copper as dead, I was talking about it in relation to the future of telecommunications and entertainment (IPTV etc) in Australia.

      I’m certainly not suggesting it’s dead now. I’m sure I’ll be enjoying my 14mbps connection for some time yet, as will thousands of other people across Australia. However for a viable future of high bandwidth content delivery, future government services, medical\science\military\education technologies and the like, copper just doesn’t have the bandwidth to take us into the 2020s.

      Copper is dead in the sense that we’re close to reaching it’s theoretical limit. I think there’s some kind of shotgun DSL tech that will deliver up to 50mbps, but that’s about where it will max out. Given how close that is, it’s wise to start moving away from it as quickly as possible. The NBN is coming along at the perfect time for Australia and I’m excited by it’s possibilities.

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