iiNet claims Telstra treachery in South Brisbane


news National broadband provider iiNet this week claimed Telstra was being heavy-handed with its treatment of wholesale customers in its new South Brisbane fibre area, virtually forcing them into signing up to agreements with its terms or facing the prospect of having their customers in the region cut off from broadband.

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.

However, in a post on broadband forum Whirlpool yesterday, iiNet chief regulatory officer Steve Dalby went further. “iiNet has now signed a fibre schedule after a lengthy and difficult process with the incumbent,” he wrote. “Our new customer plans are being finalised and we expect to commence the migration of our customers in the next few weeks.”

“The agreement is unsatisfactory and is signed with the knowledge that we have no choice, given Telstra’s massive power and the option of ‘sign before we cut your customers off’.”

Dalby said iiNet hadn’t been able to secure ‘like for like’ services on the network. “Telstra simply refuses to our request for equivalent services to those available over the regulated copper,” he wrote. “Instead of a state-of-the-art fibre to the home service being built, we have a fibre network that won’t cater for products currently being delivered on 50 year old copper.”

The executive claimed iiNet’s contract with Telstra had been signed “under duress”, and said iiNet would continue to oppose what he described as ‘anti-competitive’ practices and seek a better solution. “This is a clear example as to why Telstra must never again be allowed to operate the national telecommunications infrastructure, it’s why the ACCC must be hard-nosed about the structural separation undertaking and why I will never recommend Telstra to anyone,” Dalby concluded.

Telstra’s wholesale division has been invited to respond to the comments, but has not yet done so.

In an interview several weeks ago, Telstra’s general manager of wholesale products, Graham Bate, said that the telco had originally planned to start migrations in March, but after feedback from telco customers, decided to defer the shift until August this year.

The product suite available over the telco’s copper network — including features such as multi-cast and naked DSL — has evolved over a lengthy time period over the past decade. Bates said at the time that Telstra viewed the rollout as “the perfect opportunity for the industry and Telstra to derive some learnings about fibre”. And with respect to the complete suite of services available over copper: “The challenge is for us to replicate in our fibre product, something which customers have implemented in their own network — something which we haven’t implemented in our own network previously.”

There’s two sides to this story — and to be honest, I sympathise with both in fairly equal measure.

In the context of the wider Telstra network, South Brisbane is a fairly small project for Telstra, and it’s not clear to what extent the telco will have to modify its existing internal systems (such as billing) to be able to deliver similar services on fibre as it currently does on copper. I’m sure iiNet would like to offer its customers the equivalent of naked DSL — fibre without a telephone line, for example — but Telstra doesn’t even offer that to its own customers on its copper network at the moment.

In addition, I’m not sure to what extent multi-cast, for example, has been worked out as a technology on fibre. What internal development would be required for Telstra to get this working in a similar way as it works on copper? We just don’t know.

However, iiNet also has a point. Telstra must not be allowed to use its new fibre development in South Brisbane to set extortionate terms with its wholesale customers (who are also, obviously, competitors with its retail division). Are the terms it’s setting with iiNet extortionate? It’s not clear, as obviously neither party will release the fine details of their contract, although the ACCC may be able to get a hold of that information.

However, iiNet has been a great deal less vocal than other ISPs such as Internode recently on the matter of Telstra pricing and terms. I can only assume that this means when iiNet does get vocal on the issue, it is serious about pushing for a solution. This kind of push has become fairly normal in the telecommunications industry over the past decade — Telstra tries for terms which are a little too far, other ISPs complain to the regulator, and then we end up with a fairly decent middle-ground solution after arbitration. Let’s hope South Brisbane turns out well — or at least makes some progress before it is eventually handed over to NBN Co ;)

Image credit: Dr Stephen Dann, Creative Commons


  1. With respect to multicasting over fibre – didn’t Internode just announce that they’re offering it to their customers on the NBN now? So I guess that’s sorted.

    • As per the other reply posts to you, the NBN will support multicast next year. The difference is that Telstra won’t even discuss it with the RSPs so it doesn’t look like they intend to enable that service anytime soon. Hardly surprising if it shuts down the competition offerings and restricts the customers to Foxtel only. It’s up to the ACCC to enforce competition, something they have not been very active at it the last 12 months in this sector.

  2. Development of IP multicast for fibre: for when Layer 1 and Layer 3 magically become co-dependent. Or more realistically, for when you need a technical-sounding scapegoat to play to Joe Q. Public.

    Stick to journalism Renai, the technical aspects obviously aren’t your strong suit.

  3. Well – iiNet haven’t published their retail prices for the South Brisbane fibre, but if you want to see the future of the Coalition policy vs the current NBN policy, look no further than the Exetel prices offered over the Telstra fibre in South Brisbane vs the NBN prices:

    Telstra fibre prices:

    NBN fibre prices:

    Over Telstra fibre, you pay $50 per month at 30/1 Mbps, but with no data allowance! You pay $0.50 per GB for that! And if you want a phone line (remember those?) you have to pay an additional $25 line rental, with metered long distance calls.

    But on NBN fibre, you can get 50/20Mbps for $44.50, which includes 20GB download quota, and also includes phone, with 10c untimed national calls.

    That’s as direct a comparison as you can get – through the same RSP – with markedly superior and cheaper service over NBN fibre.

    • Yes, it will be interesting to see how much this differential is reflected in the offerings from the other RSPs as they gradually appear. Notice also that TPG also has not finalised anything yet.

      Time to pull your finger out ACCC. You’ve let it get all out of control in the last 12 months.

      • Agreed. I’m a TPG customer caught up in this mess, and I still haven’t been able to confirm a connection after 31st of October (when I loose my copper). Telstra’s and Internodes plans are far too expensive, considering I’m currently on unlimited for $60pm. Exetel is worse, and so far, there is no one else. TPG has promised they’ll have plans but these claims from iiNet do not bode well.

        So far, Telstra’s claims of being able to transfer services over to a “similar plan on the new fibre network” are pure unmitigated bullshit.

    • Yes I am sure Telstra would love the taxpayer to bankroll 100% of the South Brisbane exchange rollout with a highly dubious ROI like the NBN, so it could offer taxpayer discounted subsidised plan prices.

      Other than that the NBN and the Sth Brisbane exchange rollout are exactly the same.


      • fancy a government building infrastructure, to replace the old superseded infrastructure and giving the so called ‘hurting taxpayer’ access to cheaper subsidised plans and still receiving a roi, which will still have the construction pay it self off over time.

        why is it you are against it again?

          • Probably as much as your reply had to do with Gwyntaglaw’s post?

            Seriously how did you get from price comparisons to “Telstra wants the government to pay for South Brisbane”?

          • He was comparing NBN prices with Telstra South Brisbane exchange prices, I pointed out why NBN prices are cheaper.

            Oh and I didn’t say “Telstra wants the government to pay for South Brisbane”?

          • Oh and I didn’t say “Telstra wants the government to pay for South Brisbane”?

            Didn’t you?

            Yes I am sure Telstra would love the taxpayer to bankroll 100% of the South Brisbane exchange rollout…

            So somehow the idea that Telstra would love the idea of the taxpayer, i.e. the government, bankrolling 100%, i.e. paying for, the South Brisbane exchange rollout does not equate to Telstra would want the government to pay for South Brisbane?

            Right. I totally follow your logic there.

          • well alain here’s what you said. ‘Yes I am sure Telstra would love the taxpayer to bankroll 100% of the South Brisbane exchange.

            i just ran with it, pretty obvious really. you go off left of field and according to you, that’s ok, but when others just go with you, let alone go left of field themselves you whinge?

            you keep complaining about the sucker taxpayer bankrolling comms/nbn and isps profiting from it, don’t you?

            using that strange rationale, we should no longer build public schools, after all those teachers are profiting from that taxpayer bank roll too. and roads, what about those big courier companies, sponging from our bank roll, and public hospitals, those doctors and their taxpayer bankrolled mercs eh and don’t start my on those tax payer bankrolled courts, seen those solicitors and judges, mansions, bank rolled by the sucker taxpayer!


          • Don’t forget about paid parental leave pepe I feel like a sucker taxpayer every time I hear about it. Abbott was planing on stealing 2.7 billion per year from businesses to pay for that one… hmm not much less than the 3 billion per year for the NBN and that’s just for 9 years.

          • I was explaining why NBN pricing is cheaper than South Brisbane exchange pricing, which has nothing to do with your off topic rant supported by the usual glee club rants.

      • Other than that the NBN and the Sth Brisbane exchange rollout are exactly the same.

        You dont hear anyone complaining about a fixed line monopoly either. Yet customers in South Brisbane are forced to use fibre.

    • those Telstra prices actually make sense. they expect the average consumer to select the 8mbit option (mirroring overseas trends of consumers economising on bb spend). that’s $35 plus $25 for phone equals $60 — which is the current industry median retail spend.

      • Did you umm, notice the fact that that $35 is not inclusive of data allowance on Exetel? So it isn’t $60. It’ll be closer to $65 for light users, and could go all the way up to several hundred dollars for medium to heavy users.

      • Consider this. Ignoring the non-support or IPTV and dumb speed configurations (eg 30/1, 100/5 compared to NBN 25/5, 100/40), think about how Telstra can offer a bundle of phone and 200Gb data at 100/5 Mbps for $88 but their competitors can’t get near that. For example, Internode is more than competitive with Telstra in ADSL prices but at South Brisbane, they can only offer existing customers 30/1 with 100Gb data for $100 or 100/5 with 100Gb data for $140. New customers will have to pay even more.

        Totally anti-competitive behaviour by Telstra. The ACCC should be ashamed of themselves.

  4. Here is a thought

    im not a telstra fan ,but would this insult from iinet about Telstra’s and thier network would this give telstra a case to the accc not to supply iinet anymore

  5. I’m seeing a factual error here.

    Multicast is not a product offered over copper. Multicast is possible because the ISP has direct access to the copper pair, so they can built a multicast network right into the exchange. This is not possible in South Brisbane (or on the NBN) since the ISP connects in at some kind of interconnection point. NBNCo is therefore developing a multicast product to provide something similar to what ISPs have built. Telstra has had YEARS in which they could have developed this over their ADSL network, yet they have never bothered.

    Telstra doesn’t need to modify their network at all for fibre. It’s literally the same network as their wholesale ADSL, just with a fibre connection to the end user.

    >I’m sure iiNet would like to offer its customers the equivalent of naked DSL — fibre without a telephone line, for example — but Telstra doesn’t even offer that to its own customers on its copper network at the moment.

    Of course they don’t. Abusive monopolies can do what they like. Providing naked is even easier over fibre. You just don’t enable the phone port. It is literally less effort. The fact that they require a phone service to be bundled is simply disgusting.

    Compare this to NBNCo. They provide the phone port for *free*, so the cost of NBN 50/20 + free phone is less than Telstra 30/1 *with no phone* (but there is no option for no phone, of course). This is what we will have to put up with under the Coalition’s “plan”.

    The only way I can see anyone sympathising with Telstra is over the forced exchange relocation itself. However, it isn’t even that big of a deal to them, considering they received $80 million of (state) taxpayer dollars to fund the move. The section of land they have been forced to vacate isn’t actually going to be used for part of the hospital building. It is being used to….widen an intersection.

  6. Please Renai don’t openly lie in your articals. Telstra did offer a trial of Naked DSL services and I still have colleges and friends who are still signed up to this Telstra trial. Therefore it is baseless and false for you to sit in your high and mighty office and claim that Telstra’s billing systems or any other part of their IT infrastructure doesn’t have the ability to cope with these services. They do and there are many people using this service rignt now. Just because Telstra doesn’t offer and activly promote a service doesn’t mean their billing system is incapable. You however seam incapabile of blaming telstra for anything because it might affect their share price or your other vested interest in Telstra.

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