Optus’ NBN deal gives it an unfair advantage


opinion Optus’ $800 million National Broadband Network deal is an unnecessary and unsavoury sweetheart arrangement which smacks of favouritism and will deliver Optus a war chest with which to attack smaller rivals like iiNet, TPG and Internode; rivals which will not be paid to migrate their customers onto the NBN.

In February this year, Optus regulatory chief Maha Krisnapillai left journalists in no doubt as to how the SingTel subsidiary felt about Telstra’s $11 billion deal with the National Broadband Network Company and the Federal Government remaining private and confidential.

“It is imperative that we have full transparency of the agreements to ensure that no compromises are made that will provide Telstra with an unfair market advantage,” he said at Optus’ regular financial results briefing session.

It’s a refrain that long-running Optus chief executive Paul O’Sullivan would repeat later in the month, during a high-profile appearance at the MediaConnect conference in Queensland. “Sure, Telstra shareholders should get to see and sign off on the deal, but so should all Australians,” the executive told his audience.

Other aspects of Telstra’s deal with the Government have also given its baby brother pause. Over the past six months and previously, O’Sullivan has expressed his fear that Telstra would take the Government’s billions and use them to engage in a war on its competitors that would result in the telco taking the bulk of the market share to be gained from the NBN turmoil through sheer force of dollars being spent to win it.

O’Sullivan has referred to this effect as ‘market distortion’, and highlighted Telstra’s significant marketing push in the mobile sector in the second half of 2010 as a small example of what could happen as the NBN is rolled out — but on a much grander scale, with many more billions for the telco to play with.

With these Optus complaints in mind, the deals the Federal Government and NBN Co announced last week must have seemed like a blessing to the telco. After all, most of Optus’ complaints were addressed. The telecommunications industry has been given a massive insight into Telstra’s NBN deal courtesy of a lengthy summary document. Optus, courtesy of its own deal to shift its HFC cable customers onto the NBN, gets its own $800 million war chest to deal with the predicted Telstra marketing blitz.

And of course, there’s Telstra’s pending structural separation agreement … a document and a process which is expected to wrap the telco up so tight in red tape for the next little while that it won’t be able to get its hands free to scratch its nose.

Yes, yes, there is a lot for Optus to be happy about at the moment. No doubt the company’s executives were toasting their success last week in their palatial North Ryde digs, drinking expensive imported Singapore slings at their on-campus bar and plotting Telstra’s future downfall.

The only problem with this is how monumentally unfair it all is to the nation’s other major telecommunications companies.

Why the hell, after all, should NBN Co pay Optus $800 million to migrate its customers off its HFC cable network and onto the NBN fibre infrastructure? I can guarantee you that as the NBN rolls out fibre throughout Australia over the next decade, almost all of Optus’ HFC cable customers would eventually terminate their HFC connection and switch to the NBN organically. Why? Because the technology is incredibly superior, to start with, but also because they will have dozens of rival companies offering them great deals to do so.

In short, why is NBN Co paying Optus almost a billion dollars for something it would eventually get for free anyway?

Secondly, it is also incredibly hypocritical for Optus on the one hand to demand that the details of Telstra’s deal with NBN Co be made public, but not make its own NBN deal public. Over the past year, I have personally asked O’Sullivan to disclose any details — anything at all — about what Optus has been discussing with NBN Co behind closed doors. Over that time, the executive, and his colleagues, have consistently refused to reveal any information about those discussions.

Last week, Optus dignified customers and stakeholders in its business with just one brief page of motherhood statements about Optus being “born in competition” to satisfy their curiousity about Optus’ $800 million NBN deal. Given the leagues of print that have been expended speculating about Telstra’s own arrangement … this approach from Optus is nothing more than a bad joke.

Last week, both Optus’ O’Sullivan and NBN Co chief executive Mike Quigley claimed the Optus deal was a significant step towards creating “a level playing field” for Australia’s broadband market, with Australian consumers to be the winners. “This agreement represents a fair deal for Optus. We intend to use the NBN to turbo-charge competition,” said O’Sullivan.

The truth is, that while its $800 million cash cow represents an excellent deal for Optus, it represents a rotten deal for the rest of the industry, especially rival companies like iiNet, Internode, TPG and others. As the NBN is rolled out, these rival ISPs will face not one, but two major and dominant Australian telcos who have received direct cash injections from the Government to help them win the war for NBN market share. Both have existing mobile networks that they can bundle NBN plans with, and now both will have the funds to engage in a devastating marketing war which will leave consumers’ ears and eyes ringing with slogans delivered by obnoxious penguins chugging down Coronas from yellow sports cars.

You can understand why Telstra needs to be paid to shut down its copper telecommunications network. It’s a massive item on a balance sheet which underpins the entire telecommunications industry, and the company needs to be compensated for it. In addition, NBN Co needs to get access to Telstra’s infrastructure to roll out its fibre network, and Telstra should be compensated for that. But these things don’t apply to Optus, who will have its minority infrastructure investment stranded just like every other telco (hello, DSLAM millions) as the NBN is rolled out.

Now, the irony is writ extremely large here.

Throughout the past decade, it has been companies like iiNet and Internode, with some help from others like TPG and Netspace, who have driven broadband competition in Australia forward, through painstakingly negotiating nightmarish arrangments with Telstra and gruellingly installing ADSL DSLAM infrastructure in telephone exchanges.

Were it not for these efforts, Telstra and Optus, bruised from their HFC cable war in the late 1990’s, would never have upgraded their networks with the ADSL2+ broadband the nation enjoys today.
And yet, there is simply no way that NBN Co will grant iiNet, Internode and TPG the same kind of sweetheart deals that first Telstra, and now Optus, have managed to wrangle. They will be left to negotiate commercial terms on a normal basis with everybody else.

There is no doubt that the smaller ISPs are aware of this fact. “Cool,” sarcastically wrote Internode MD Simon Hackett on Twitter last week, responding to NBN Co’s Optus deal announcement. “Can I have the same deal for the Agile fixed WiMax networks in SA please? That’d be only fair and reasonable.” And then: “Yes, we have already asked, you already said no”.

Yet, somewhat heroically, the smaller ISPs have already stepped up to the plate to shoulder Australia’s burden of broadband innovation again. Hackett has personally pledged to make his company the first to sign up customers in every location the NBN rolls out in, and iiNet’s not far behind. Meanwhile, Optus and Telstra were late to the NBN trials in Tasmania, and don’t appear to have made much progress signing up early NBN adopter customers on the mainland either.

Telecommunications analyst Kevin Morgan this week accused Communications Minister Stephen Conroy of looking after his “mates” at Optus, describing the SingTel subsidiary’s deal as “extraordinary largesse” and highlighting the fact that Optus has supported Conroy over the past few years while the NBN has gathered steam.

“Throughout the four years wrangling that supposedly saw Telstra structurally separated and locked into the NBN (neither has happened in reality) Optus has been Conroy’s most loyal ally and often his attack dog … Now it’s pay-off time,” wrote Morgan.

Personally, it makes me sick.

I am tired of Optus’ rampant hypocrisy in cloaking its self-interest in the guise of industry reform; tired of Optus’ secrecy while demanding transparency from others; tired of Optus’ lack of investment in Australia while supporting government-funded networks, and tired of Optus’ lack of innovation and preference for letting its competitors go first.

I don’t mind self-interest; it’s what capitalism is based on. But let it be naked; let it be honest. Let it be up-front and in the open air and not hidden behind altruistic rhetoric that demeans those who try and get us to believe it. We should suffer nothing less than but Optus hold itself to the same standards to which it holds others; instead of pulling ahead through signing back-room deals that its competitors won’t have access to and that will never see the light of day.

Image credit: Optus


  1. Take a chill pill and a Maxalon. You’ll feel a lot better, maybe wash them down with a good alcoholic drink. When you wake it will be all over.

    Simon Hackett is always about publicity.

  2. The NBN is focusing on the last mile, the deal with Optus (and the customer part of the deal with Telstra) is to move customers off their own last mile and onto the NBN last mile, you can’t bring the NBN in and say “you can no long use your infrastructure, you have to pay us now and use ours”, it doesn’t work that way.

    I’m not going to argue the payment amount, but I do understand the need for telcos delivering their own last mile infrastructure to be compensated if the government is going to more or less force them to move customers off that infrastructure and onto the NBN.

    Note Hackett’s Wimax delivery is separate and unrelated to the discussion since it is wireless, but it would be a fair call for Transact in the ACT or for residential areas where companies like iiNet or Internode have fibred up for compensation to be paid to them should those customers be moved off the relevant telco infrastructure and onto the NBN.

    • My question is: Why does the Government need to mandate that Optus customers shift onto the NBN fibre? I anticipate most will move anyway.

      • Bravo Renai,

        I think your your eyes are starting to open up.

        Now keep going and you will you see the twist in the plot before you will be rewarded with the revelation that is the truth.

        Bravo. You have genuinely surprised me.

        • Incase people dont get it, the reason that the government is doing this is to force people off HFC, because otherwise its in direct competition with NBNCo’s business model

          NBNCo needs the high bandwidth users currently on HFC to stack up

          • you see, that’s the irony. everyone knows the only possible / universal / substantive use for superfast broadband is for delivery of IPTV or VOD. yet the Telstra deal allows Telstra to continue delivering pay-TV over its HFC network… in direct competition to NBNco.

  3. I can only assume because we’re talking a large number of customers and at this stage the NBN would benefit from as many connected customers (or guaranteed future connected customers) as possible.

    And what makes you assume people would shift onto the NBN just because it’s there? Excluding any potential cost savings (which there may not even be) it would all come down to what extra benefits could be gained on top of the current service and what would it cost (not just in delivery, but also hardware at home and setup costs) to change over.

    And for example, one of the big selling points of the NBN was remote medical assessments, reading the news this week it said to video conference to a specialist you’ll need to be a GP’s office, great to see it being done but that’s one less benefit that was touted that can’t be used by people from their own home.

    • I understand the arguments … but I had believed the NBN was intended to charge customers for access — not pay telcos to move their customer base onto its network. Certainly the other ISPs will need to fight tooth and claw for NBN customers and will pay for the privilege of using NBN Co’s network.

      • Both Telstra and Optus will have to pay NBN Co for last mile access, just like every other RSP.

        And of course the reason why other service providers aren’t being compensated, because they are using Telstra’s last mile infrastructure, and Telstra being the deliver at the last mile is being compensated, for places where another provider is providing their own infrastructure they should also be compensated.

        Really think about it this way, if you’re Telstra or Optus and you currently pay $X/month/user to maintain the delivery, and the NBN comes along and to move customers over you’re now going to be paying $Y/month/user, and Y is a greater number than X, it would not make business sense to move the customers, hence why there is for financial compensation.

        • No, I mean the ISPs will be paying NBN Co.

          I take your point, but here’s the thing: The only reason that NBN Co needs to pay Optus, is because it is mandating that customers be moved across to its network from the HFC network. In addition, the only reason this needs to be mandated is because of the need for the NBN to make some sort of financial return through gaining as much customer number scale as possible.

          The problem with that is that it’s faulty logic. Odds are that most customers would simply move across to the NBN from the HFC network when it’s rolled out anyway. You don’t need to mandate it — most customers will eventually shift as the benefits and the hype around the NBN become clear. Hence, NBN Co will likely wind up financially in a pretty similar situation — without the mandated HFC network shutdown. It’s the theory of efficient markets — when a better product comes along, most people will switch rationally.

          What NBN Co is essentially paying for is the swift migration of those customers, and the guarantee that it will start receiving cheques from Optus for the customers’ use of the network immediately. However … this doesn’t appear to make much sense; unless you’re Optus ;)

          • ” I can guarantee you that as the NBN rolls out fibre throughout Australia over the next decade, almost all of Optus’ HFC cable customers would eventually terminate their HFC connection and switch to the NBN organically. Why? Because the technology is incredibly superior”

            Renai, i think you’re mistaken.

            if people would move simply because it is a better technology then every single mobile customer in australia would be using telstra’s nextg network.
            it’s quite clearly superior to it’s competitor’s networks (at least it was, the other are improving) and yet people still stay with the likes of optus, vodafone, virgin etc.

          • *It’s the theory of efficient markets — when a better product comes along, most people will switch rationally.*

            how come Toyota doesn’t just scrap the Corolla and only sell Lexus.

          • The problem is it’s all about giving Optus some compensation to shut them up because the Government has given Telstra a hell of lot of compensation.

            Your assumption that the Optus HFC customers would come across anyway to the NBN is fine based on the presumption the NBN is ‘better’ but if the Government took that approach they would have to treat Telstra HFC customers exactly the same way.

            The big risk of course with such a approach in a already high risk FTTH rollout is that Telstra and Optus could decide to keep their HFC infrastructure and undercut the NBN with very favourable HFC packages, like they do today competing against competitor ADSL, and don’t offer as good value packages on the NBN in HFC covered areas.

            With the HFC footprint covering the high density higher income suburbs in the three biggest capitals this is to be avoided (i.e giving those residences a choice) at all cost.

            The NBN Co needs all of Telstra’s and Optus’s customers to be forced migrated, especially those customers on HFC who are more likely to stack on the lucrative add on services above bog standard NBN BB, they don’t want too many customers using the NBN just as a phone service.

            The NBN monopoly is all about no fixed line choice whatever, they don’t want customers ‘thinking about choices’ – too risky.

          • Remember – the NBN is designed to supply most of Australia with access. Metropolitan users will effectively subsidize rural users. This is why we need the government to make this happen – the model is not a normal business case.

            Telsta and Optus’s HFC networks are cherry picking networks from the moment they were installed. It is an example of what’s private corporations would install or upgrade today. They are value for money and turn profit. In these places it is likely they can provide services competing against the NBN, cheaper than the NBN which will need to charge more to subsidize rural Australia. Therefore people may not move off them voluntarily …in fact I believe that they won’t.

            As was said earlier we are only talking last mile suppliers here. What if Optus began wholesaling its HFC to iiNet, Internode etc after Telstra shut down their HFC (and copper)? It would be very bad and a huge risk.

            I doubt any other ISP’s have infrastructure that can provide that kind of wholesale competition risk, and if they did, I bet they will be or are in talks with the NBN.

            As for your argument though, it is really apples and oranges.

          • Beaten 3 times…that’s embarrassing. I will blame my tablet and 3g for my slow response. Good to see so many agree enough to post about it though!

          • It’s already been answered pretty well, but to surmise there are 2 reasons ..

            1/ It means that Optus (and Telstra) won’t have a competing last mile network they can use to undercut the NBN prices on

            2/ It would mean the last mile delivery for all fixed line services is done via the NBN, ie. the NBN has no competition, ie. providing the NBN wholesale cost structure is standard the last mile delivery will be a level playing field (so to speak)

          • As has been stated here many times, on a national scale, the people that move over to better technology are actually in a minority. You will find that most of the times its because of
            1. Grandfathered plans
            2. The technology happens to be offered at a cheaper price

            If HFC can deliver the same service as a customer as the NBN fibre, then almost no one has a reason to move over. BTW as was shown in a trial in Britain, HFC can deliver speeds of up to 1.5gbs with channel bonding

          • In Portugal, there’s an ISP thats been delivering 1Gbps over HFC for 2 years (DOCSIS 3.0), but don’t tell the script kiddies over at whirlpool, as they still believe that GPON is direct (non-shared) & that the TCP window size won’t apply to them over the 200-250ms links to the US.

          • Based upon the average number of clients per node (about 500 on average, I have anedocatal figures of 400 for TransACT and 1200 for Telstra and Optus) and the maximum permissible bandwidth via DOCSIS 3.0 (about 5.5Gbps aggregate on a 5:2 split) the contention ratio of a 1000Mbps/400Mbps service (maximum PIR service on the NBN under GPON) the hardware level contention ratio of a HFC service offering 1Gbps is typically 125:1. This is compared to GPON which has a hardware level contention ratio of 13:1. That added with the limited footprint of the technology means the GPON is a far superior technology, policy decisions (CVC) not withstanding.

            This “script kiddie” already knew about 1Gbps services in Portogal, did you also know about the 1Gbps services by Comcast in the US, and the 1.5Gbps services in the United Kingdom by VirginMedia? I did, and I still back GPON, because unlike you, I actually know more about networking than the tag-line “speed”.

          • *don’t tell the script kiddies over at whirlpool*

            it’s whirlpool… the fresh FUD people…

        • *Really think about it this way, if you’re Telstra or Optus and you currently pay $X/month/user to maintain the delivery, and the NBN comes along and to move customers over you’re now going to be paying $Y/month/user, and Y is a greater number than X, it would not make business sense to move the customers, hence why there is for financial compensation.*

          assume Optus sells $X HFC to its cable customers for $Z. they earn a wholesale margin of $X and a retail margin of $(Z-X).

          if Optus shifts its customers over to NBN fibre paying $Y wholesale margin and charging its customers $W, they will now only earn the retail margin of $(W-Y). assuming that its retail costs remain the same as before, $(Z-X) will equal $(W-Y).

          hence, NBNco is essentially compensating Optus for its forgone HFC wholesale margin of $X.

          the cost of compensating Optus, $X, will be absorbed within $Y, or is passed straight on to the consumer.

          the higher price paid by the consumer, $(W-Z), represents an outright loss to the consumer.

          W – Y = Z – X

          W – Z = Y – X

          the loss to the consumer is just the higher wholesale cost of accessing fibre over HFC.

          the same logic applies to the Telstra deal.

      • Hang on, or do you mean that the end customer would be paying NBN Co for connectivity via the NBN, and then a separate payment to the RSP(s) or other services they have connected via the NBN?

  4. It’s great that Renai “dishes it out equally” – it’s the hallmark of a fair journalist, and there are very few of those around! The problem is that anything NBN related with a slight negative whiff will be picked up on, exaggerated, and published by News Ltd every day for a month. it’s a tough balancing act.

    • That’s exactly my concern. I’m not disagreeing with any of the points made in this article, but there’s been a ton of NBN critiscm here lately in general, that will do nothing but hurt the public’s perception of a project already being misrepresented and blasted from every angle in right wing media like The Australian.

      I guess as a fellow NBN supporter, ultimately Renai has to decide whether this kind of negative attention is what he wants to bring to the table with these opinion pieces. I know he will argue that as a journalist it’s his job to report every story, whether he thinks it will hurt the NBN or not, but a strong opinion piece is very different to the usual objective reporting at Delimiter and it obviously makes me cringe reading something as negative as this.

      I’m sure the usual crowd of NBN naysayer commenters here will love this.

      • News limited isn’t any less objective then Delimiter, or ZDNet. I think you may be confusing their opinion pieces with actual media release (in an opinion piece, you can be as subjective as you want, thats why its called an opinion piece)

        • When News Ltd goes around saying that every house will have to pay $5000 to get wired up to connect to the NBN, that’s not an opinion piece, that is shit reporting.

          When they go around saying that having a 15% take-up rate within 8 months (or whatever it was) is “disastrous” – without comparing it to the take up rate of ADSL, or the phone network itself, after a similar time frame – that is shit reporting.

          • Perhaps you also mean the sh*t reporting that no public Tassie school with an NBN box is currently connected to the NBN?

            I’m sure the billions spent on the NBN in Tassie could have built them a new hospital in Hobart – that Andrew Wilkie once tricked Abbot into thinking he wanted. Oh well, never mind, I’m sure they’ll have NBN doctors from India soon enough.

          • You’re a real right wing ranter aren’t you? Are you related to Alam Jones? Never mind the fact that has been publicly stated by the schools, that most of them have existing contractual obligations to fulfill. Conroy’s has already set the record straight on that one. They will get fibre soon.

            And I just love your fantastic twist on Wilkie “tricking Abbott”. The reality is
            Abbott tried to bribe him with an insanely overboard $1billion dollars that was entirely unnecessary and ridiculous, so Wilkie did the sane and sensible thing rejecting it, while exposing Abbott’s backdoor bribery. Instead the hospital has receieved a more reasonable boost from the Federal government and is being upgraded as planned.

            By all means continue to post your contorted propaganda though. It’s most entertaining and you’re fooling no one.

  5. Dont agree these opinions in these blogs , but i thought this one wasnt bad liek the others.

    Kind of agree with it

    Optus should be split up like telstra is

  6. Optus has about 500,000 customers on their HFC network. If the NBNCo’s business case is so fragile they need to buy those customers rather than win them then the NBN project is in a lot of trouble.

    It has been reported (The Australian, 1 July 2011) that Telstra insisted on Optus being bought off their HFC network as part of the deal. I don’t know if this is true though.

  7. You say “Were it not for these efforts, Telstra and Optus … would never have upgraded their networks with the ADSL2+ broadband the nation enjoys today.”

    What rubbish. The nation has so few on ADSL2+, that the greater part of the reason that NBN was considered, was the reduced expansion of services ‘throughout the nation’ by Telstra. YOU may have it Renai, and your pals, but the majority don’t. Some are still on fixed wireless, dialup and satellite, and most are on ADSL at about 1-2 Mb/s. Don’t pretend that your brush paints ALL of the nation. Telstra’s reluctance to move forward has lost them their wholesale line business, with the looming NBN. Good riddance to them too.

    • Col, if it wasnt for iinet, internode and tpg, NOBODY would have adsl2. Just because YOU dont have it, doesnt mean the point being made is irrelevant.

    • Why is Telstra still expanding their ADSL2+ DSLAM network? Perhaps they’re smart by taking a punt that Abbot will win the next election & put a stop to the $36-50 billion NBN waste?

      • Why do wireless networks continue to invest in 3G HSPA+ solutions when LTE and WiMax are just around the corner for deployment and will quickly dominate market-share once deployed?

        If Telstra were making the punt they would probably be installing VDSL2 DSLAMS as they offer far better performance, especially if LR-VDSL2 is deployed, and thus would offer a far better investment for the Telecom. Telstra are just being smart, as you would expect them to be.

  8. I think this article is a bit over sensationalised.

    “Why the hell, after all, should NBN Co pay Optus $800 million to migrate its customers off its HFC cable network and onto the NBN fibre infrastructure? I can guarantee you that as the NBN rolls out fibre throughout Australia over the next decade, almost all of Optus’ HFC cable customers would eventually terminate their HFC connection and switch to the NBN organically. Why? Because the technology is incredibly superior, to start with, but also because they will have dozens of rival companies offering them great deals to do so.”

    1. Exactly the same thing can be said for Telstra’s network. So why is NBN Co paying Telstra to migrate its customers over?

    2. Telstra made the shutdown of the [Optus] cable one of the conditions to its participation in the deal. http://www.theaustralian.com.au/business/opinion/nbn-deal-to-shut-rival-optus-cable/story-e6frg9if-1226078828089

    ” drinking expensive imported Singapore slings at their on-campus bar”

    Singapore Sling is a cocktail. It is made on the spot using normal ingredients found in a bar. Calling it an expensive import is like calling Bloody Mary an expensive Parisan import, or a New York cheesecake an expensive American import.

  9. The real issue is, that with all these deals going on, its going to put us into a worse situation where we are now where companies are being basically handed free cash which they can use to figuratively squash their competitors

    Remember that Optus is being paid to just “not use HFC for broadband”. That is it, there is no actual cost to Optus for not providing broadband over HFC, the infrastructure is still there,and the profit margins will simply be transferred from HFC to NBN

    Same deal with Telstra, Telstra is not actually going to rip out the copper, its just being decommissioned (i.e. not being used). It doesn’t cost Telstra not to use their network for something (apart from laying off staff, but Gillard is paying for that as well)

    I definitely do not want to return to the 90’s where everything is going to be Telstra/Optus

    • @ deteego…

      It’s the old damned if they do/don’t, according to you, I’m sure!

      Here you are complaining about the government compensating Optus but had the government just overbuilt them you would be whinging about the lack of compensation.

      Go on admit it… wouldn’t you?

      Seriously, you guys “always” take a negative politically motivated stance (dare I say spread FUD) regardless of the situation!

    • Ooh deteego you also say –

      “I definitely do not want to return to the 90′s where everything is going to be Telstra/Optus”…

      So where exactly does that claim fit in with YOUR party’s FTTN plan, with both Optus and Telstra only, having and keeping HFC networks and both (particularly NextG) having comprehensive mobile networks…?

      Sounds like the opposition plan will do exactly as you say you wish to avoid… curious!

  10. Telstra is not actually going to rip out the copper

    Actually, considering the deal is to use the conduits, Telstra will have to do exactly that.

    • NBNCo, not Telstra

      Under the agreement, Telstra is just leasing the room inside their ducts. They are not being asked to take anything out, and its not part of the agreement.

      • Well it’s probably mixed, some conduits may have to be cleared if they are already chockers, some may have room and some conduits links as the NBN Co have indicated will have to be new.

        • I agree alain… how about that?

          And… One day when you can see past your politics/employer/wallet/nose, you may even be man enough to say that back to me…

          But until pigs fly, please keep the Googled, comical rhetoric coming, tiger!

          Ooh so “WITH THE TOPIC BEING HFC”, speaking of comical rhetoric and contradictorily so… what’s your latest thoughts? Being Saturday is it alain’s “you betcha the NBN will be a success” or “NBN will fail like HFC” day?

          I’m pretty sure one of your many other ridiculous contradictions, “competitive HFC networks shouldn’t be closed by the monopoly NBN” is another Saturday’s claim and Sunday is “HFC was a complete failure”, day.

          So you may want to at least synch the two HFC failure days together…Maybe make those Mon, Wed, Fri, Sun and leave the alternates for your completely contradictory position…!

          Just a friendly tip for the uneducated to keep all bases covered, as I am in an agreeing, friendly mood, as clearly witnessed in my opening sentence.

          • Keep making up the fiction RS, out of context statements most of them not by me any way (when in doubt make it up) across different blog subjects across different months and even web sites, it’s pathetic.

            You actually delude yourself that all that childish copy & paste BS is working as a counter argument!

          • BTW I’m not responding to you anymore, your obvious strategy is to deliberately troll and attract off topic personal attacks like you dish out so that the replies get deleted, you obviously don’t care if you get binned (waa – ooh sorry I’ll be good promise) because you know it’s only temporary and there is always another day.

          • @alain/advocate…

            You have said that you will never correspond with me before, both as alain and your other name, advocate, HAVEN’T YOU? But alas…

            Anyway to rebut your above comment…

            Here is your “complete comment IN CONTEXT” from ZDNet Nov 15 2010.

            1. “This historical fact is that Pay TV uptake was low so it did not pay for the HFC rollout, hmm will history repeat on the NBN because end users don’t really need FTTH products?

            YOU BETCHA THE NBN WILL BE A SUCCESS because all the fixed line competitors are eliminated by its owner the Australian Government – simple process of how a monopoly works” {END}

            Now here’s another “complete comment IN CONTEXT” from ZDNet Nov 22 2010 –

            2. We also don’t know if it’s going to be $11 billion for Telstra or not and what the figure for Optus will be, as we have no idea of the final contacted figures predictions are navel gazing.

            THE NBN WILL NEVER PAY ITSELF OFF, THE TASMANIAN PILOT WON’T EVEN PAY ITSELF OFF, not many wanting it doesn’t help that one – oh dear!, we had better move choices of fixed line BB away from the punters, that should fix it – but please don’t mention wireless {END}


            1. http://www.zdnet.com.au/why-copper-and-hfc-cant-save-us-339307097.htm
            2. http://www.zdnet.com.au/nbn-broadband-prices-will-drop-quigley-339307423.htm

            Again I say, that you contradict yourself to suit the argument at the time…and here is the proof, in context..! You say it will be a success in one thread and claim it will never pay itself off in another!

            There are plenty more contradictions relating to HFC too…

            Perhaps it would be easiest if you just claimed you aren’t actually advocate after all…sigh!

  11. Renai, i personally feel you are drawing a long bow to say that “almost all of Optus’ HFC cable customers would eventually terminate their HFC connection and switch to the NBN organically”. i feel thats a brave call to be making at this point. asides from the issue of 24mo. contracts that hold a customer on HFC for as long as possible others will simply not trust the idea of moving from proven platform (HFC) to unproven (nbn VidOIP) – and i say video because to the mums and dads and not the geekerati that is the main drawcard of HFC not necessarily the data aspect.

    i really am surprised at the bashing of the Optus deal so far. most analysts seemed to peg the deal at a 1bn before the Telstra signage, but the deal worked out to be an 800mil item instead – a cool 20% off. in any case thats based in the ‘due compensation’ for forced replacement of the network – much as Telstra have argued for a long time.

    thats why there is the figure paid optus. not that optus needs ‘shutting up’, just the ‘good for the goose, good for the gander’ aspect of things. as for Telstra, so for Optus. AFAIK the govt (via NBN) do treat Bigpond the same way – excepting they dont pay as much to BP for its network turnover for the fact that Telstra isnt retiring its HFC and will still provision paytv over it – tho not data services, outside of certain edge cases. and they certainly arent ripping out copper – just handing over the customer value attatched to them.

    theres also the aspect that Optus is not retaining its HFC paytv broadcast and presumably that means they wont be bothering with maintenance upkeep other than the areas where ‘business’ connections and so forth keep the network running. i had to wonder if that didnt mean Optus wouldnt be actively tearing down HFC that was useless to them in those areas – which would mean there would be some labour cost etc involved in teardown. its not really clear from press releases whether that sort of work is included in the 800mil deal. but i can understand the idea of retirement of those sectors of Optus’s network being a compensated item, for various reasons.

    i do agree with the idea if T and Optus have been compensated so should the minnows for the work they have done. Transact being a good example.

    also have to agree with Tezz that Govt is looking at economies of scale and therefore the most ‘old’ format connections it can push over to NBN the better. ‘old’ being copper and HFC of course, with the occasional legacy ISDN and dialuip i imagine – tho they aint likely to be many these days lol.

    for once i can fully agree with Tosh – if people would automatically migrate to the best platform we wouldnt be seeing ads for corollas much anymore – as the lexus is so much better, aint it? aint necessarily so, as the song goes.

  12. If some of the whingers had put a bit of capital of their own into some infrastructure, they to may have been compensated. But they would rather whinge about access to someone else’s infrastructure. One wonders what they will whinge about with the NBN when everyone will be on the same playing field.

    Then there is wireless technology, as the mobile carriers move towards 4LTE technology I don’t see Telstra or Optus for that matter wholesaling these products. The 3G bandwidth is stretched to the limit now. I see both Telstra and Optus keeping their 4LTE networks for their own cash cow. From what I gather telstra doesn’t wholesale its Next G product now anyway. If Optus goes that way too, the Simon Hackett’s of this world will have even more to whinge about. It might just send the message that if one wants to be a real player, one needs to invest in infrastructure and not leave it to someone else.

    • +1000

      best post of the month. telling it how it is.

      it’s easy to so-called “compete” or “innovate” when all you’re doing really is engaging in regulatory gaming (arbitraging TW and ULL) with the incumbent’s hands tied behind its back trying to protect the value of its wholesale network.

      now that Telstra is on an even footing with everyone else in terms of product pricing (i.e. not having to lag behind its smaller competitors), the other ISPs are running scared and now whinging for more “government help” to so-called “compete”.

      take away “government subsidies” and “regulatory favours” and these ISPs have nothing to offer other than good ole “Telstra-bashing” (which panders to the ignorant) and congested networks.

      at least Optus actually built an alternate HFC network!

      • I actually agree with you Tosh…(shock horror… I told alain earlier, I was in an agreeing mood…LOL)!

        Let’s not forget the enviable situation Telstra was in, by being vested the PSTN. However, realistically, it is a tricky situation. By Telstra receiving the PSTN they received a real advantage. BUT, by having cheap legislated access, Telstra’s competitors had no incentive to invest.

        Catch 22…

        I always laugh when people claim the pseudo competition we have is competition. A company enters a Telstra exchange, installs a DSLAM or two in Telstra’s exchange and hooks up via Telstra’s network… seriously!

        So even though you (for your own reasons!) do not support the NBN, surely the NBN ridding us of such situations (situations which would simply again raise their ugly head, if FTTN was to be implemented) is a good thing.

        Again I reiterate, the NBN isn’t perfect far from it…but nothing is… so it’s the best alternative we have… imo!

  13. “One wonders what they will whinge about with the NBN when everyone will be on the same playing field.”

    Nothing much will change except the Telstra whinge queue desk at the ACCC will be renamed the NBN Co whinge queue and it will have Telstra in it standing behind Hackett.


    • See that’s where even in jest you show your lack of comprehension and complete partiality, alain.

      The biggest issue for Telstra’s opponents was Telstra being the network owner and also reseller, making an untenable “conflict of interest”…

      NBNCo DOES NOT have such a conflict of interest.

      If you can’t comprehend even the small details, it’s no wonder the big picture issues totally elude you, tiger!

      • So you absolutely guarantee there will be no disputes about the NBN lodged by any ISP with the ACCC pre or post NBN full monopoly?

          • It will be centered around two main themes.

            1. It ain’t cheap enough
            2. The big two are getting preferential treatment.

          • And with FTTN and HFC

            1. It ain’t cheap enough

            2. The big two (especially the big ONE) are getting preferential treatment.

  14. Oh alain, why do you always insist on being defensively ridiculous, instead of just saying yeah “maybe, but I still think there will be problems”? Then my return reply could be “yeah maybe…but I think problems will be greatly reduced…the end…!

    But no…

    As such, two can go YOUR ridiculously pedantic childish route…

    So you absolutely guarantee the whinge queue desk at the ACCC will be renamed the NBN Co whinge queue and it will have Telstra in it standing behind Hackett?

    • So that’s a NO to a guarantee then – thought so, the ACCC communications disputes section will be as busy as ever.

  15. Sigh… and to continue the ridiculously, childish rhetoric, in true alain style…

    So that’s a NO to a guarantee then – thought so, there is no desk (idiotically referred to as the whinge desk) at the ACCC, let alone it being renamed and Hackett and Telstra lining up at it.

    Please feel free to have the last say here tiger, as I have already proven your ridiculous tactic, as the childish stupidity it is and all you are now doing is further proving me absolutely correct once again…!

  16. There should have been a cost per customer arrangement where each ISP that moves a customer to the NBN is paid X amount per customer. That would have been fairer and within the capacity of the NBN.


    • The compensation payment is not for customers to move to the NBN, it’s for the carriers who have their own last mile delivery to stop using it.

      And before you say, “well iiNet, Internode, TPG, etc, have their own DSLAMs, those are useless now”, no, they’re not.

      The NBN is not going to pay to rewire places like shopping centres, so you just take your DSLAM, put into the comms room at a place like a shopping centre, and wham you’ve got high speed DSL (since the only copper is the internally building wiring) to all the stores.

      So why should those service providers who are effectively going to be losing nothing be paid as well?

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