Telstra has resolved South Brisbane issue, says ACCC

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news The national competition regulator has declared it is satisfied with a new deal which the nation’s largest telco Telstra has offered rivals with respect to its controversial fibre replacement program in the South Brisbane exchange area, in a move immediately welcomed by the big T.

Telstra has chosen to replace the copper connections to about 20,000 premises in the region as the 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.

However, over the past year other major ISPs such as iiNet and Internode have expressed strenuous complaints about Telstra’s handling of the situation, with issues ranging from the company’s wholesale prices — which are claimed to be markedly higher than equivalent broadband prices on the previous copper network — to the lack of equivalent services such as the ability to stream IPTV services via multi-cast. Last week Optus CEO Paul O’Sullivan added his voice to the complaints.

However, in a statement which appeared to have been issued this week, the Australian Competition and Consumer Commission (ACCC) appears to have signalled it is now satisfied with Telstra’s response to the issue.

“In response to industry concerns about the adequacy and timing of information provided by Telstra, the ACCC wrote to Telstra regarding the closure of the exchange in September 2010,” the regulator wrote.

“Subsequently, access seekers acquiring regulated unconditioned local loop (ULLS) and line sharing (LSS) services raised further concerns about the likely effect on competition when these copper-based wholesale inputs are withdrawn. The ACCC has been in ongoing discussions with Telstra during 2011 regarding the terms of access for fibre-based wholesale services in South Brisbane.”
Telstra, the ACCC noted, had now advised the regulator that it had offered improved terms of access to the other ISPs.

“The ACCC considers that Telstra’s offer is capable of resolving the primary commercial concerns raised by access seekers,” the regulator wrote. “In particular, the revised terms will enable service providers to continue their service offerings, and ensure that consumers in South Brisbane have a range of options in terms of both products and providers.” The regulator added that it would consider any new issues with regard to South Brisbane if and when they arose.

It also appears as if the ACCC may have considered the matter as part of a draft determination into regulation of what is known as a ‘bitstream’ service.

In a joint submission to the Australian Competition and Consumer Commission published in September (PDF) filed by law firm Herbert Geer, iiNet and Internode 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 ACCC yesterday published a draft determination in the matter (PDF). However it is not clear from the determination how the ACCC reacted to the ISP’s comments.

The ACCC has also issued a statement on the bitstream issue.

“Although the service has not been declared at this stage, the ACCC is moving towards finalising the service description,” ACCC chairman Rod Sims said. “This is a chance for industry to have a final say before the local bitstream access service becomes permanent with no future opportunity for adjustment.”

A spokesperson for Telstra’s Wholesale division immediately welcomed the news. “We have been working closely with our wholesale customers and the ACCC over the last 18 months to ensure the transition runs as smoothly as possible and this outcome reflects that constructive and transparent engagement,” they wrote.

Representatives from Optus, iiNet and Internode have been invited to comment on the matter.

opinion/analysis
Cue howls of outrage from the various telcos involved. The fact that Optus CEO Paul O’Sullivan was complaining about South Brisbane last week does not bode well for the idea that all of Telstra’s wholesale ISP customers are on board with this resolution. I would be very surprised if an amicable outcome has been reached for all concerned.

16 COMMENTS

  1. “… In particular, the revised terms will enable service providers to continue their service offerings, and ensure that consumers in South Brisbane have a range of options in terms of both products and providers.”

    -Somebody should tell TPG that.

    We live in Dutton Park. Half way through our current contract, they have informed us that because of the fibre upgrade, they want to force us into a new more pricey plan and, lo and behold! … a brand new 12 month term contract! TPG refuses to honour the terms of our current agreement and has threatened to cut us off from broadband within the next few days unless we submit to their new plans.

    Calls to TPG have yielded no result. I wonder if there are more South Siders facing similar abuse from their current ISP.

    • @ EdD

      This isn’t new game plan for TPG. My mum use to be on a ADSL1 TPG plan with that as that was all the exchange offered at the time, she isn’t a high usage user and the speed was fine.

      Well after TPG installed ADSL2 gear into the exchange, she was forced over to ADSL2. You say whats so wrong with that, fast speeds etc. Well the problem was our ADSL1 plan couldn’t be kept, we had to move to a new ADSL2 and the cheapest ADSL2 plan was about $20 a month more than we had currently been paying. Why yes its a faster speed, and many more GB’s a month, but when you hadn’t been using all the data on the old plan, this isn’t a selling point!

      We churned to iiNet naked, at the time it was $50 a month and offered much better service and value that TPG.

      In the end it was worked out that TPG wanted/forced us to move as the ADSL1 service was provided by telstra, they made more money by using their own hardware. I guess this is what they are doing to you.

      Really sounds like a ACCC type of thing.

  2. “In particular, the revised terms will enable service providers to continue their service offerings”

    What a load of rot – Internode and iiNet cannot continue to offer their FetchTV service offerings to customers in South Brisbane…

  3. ACCC says its ‘capable’ of solving the problem. doesnt at all mean its going to happen.

    a car can be ‘capable’ of 240kph but does that mean its going to happen?

    i suspect the best that can be said is that its capable of solving SOME problems. others will remain intractable…. until Telstra invent Multicasting, for one example.

    i have to say i am immediately suspicious of the ACCCs blithe ‘no problems here, nothing to see, move on’ attitude. and same with Telstra – ‘we’ve offered improved terms of access’ doesnt mean it is necessarily useful to access seekers – there can be an “improved service” thats still a pile of shite, just not steaming quite as much as it was a while ago.

    it really really does come down to the details and i damn well bet theres a devil or two in there. the ACCC also trumpets this is the time for access seekers to be involved in setting new terms of access but if you let them submit to the group setting terms but the group completely ignores the submission we go nowhere; and then locking the bitstream policy at that point is going to be telstra privatisation all over again, particularly with the Coalition policy as it stands now.

    details really need to come out and go through robust discussion and commentary and even revision before locking things down. a bald assertion that ‘things are fixed’ doesnt at all cut it, for me.

    also tipping this is not an amicable agreement but the smaller folk being strongarmed by the one with market power. if so, we’ve seen this movie before, and its one of the primary reasons we HAVE an NBN policy in the first place, to break that distortive market power. going back to the status quo ante is NOT going to be helpful at all.

    wonder if its time to rebrand ACCC- Australian Corporate Collusion Commission mebbe? Certainly doesnt seem to have competition in its remit anymore.

    • You are forgetting that Telstra paid this out of their own money, and what you are suggesting is that ACCC should control what services Telstra should provide over its own asset that it built

      No one was stopping any of the other ISP’s from installing their own fibre infrastructure in the south brisbane

      • No, Telstra definitely did not pay this out of their own money – they were given $50 million + “compensation” for the exchange and land, plus a $28 million taxpayer loan. By contrast, ISPs with millions of dollars of investments in the exchange received absolutely nothing…

        • the agreement between Telstra and the QLD government was a 100% commercial, arms-length transaction with no subsidies whatsoever.

          Telstra had to be compensated because they were giving up a valuable piece of land and a building that sits on top of that land. the ISPs received absolutely nothing because they own absolutely nothing.

          they were more than welcome to go retrieve those fully-depreciated, electronic boxes of theirs sitting in Telstra’s exchange. neither Telstra nor the QLD government is coveting their metal scrap.

          • “the ISPs received absolutely nothing because they own absolutely nothing.”
            More rot. If a shop fits out the shop then the owner decides to terminate the lease (and not pay a penalty) the shopkeeper would be rightfully annoyed (to say the least), don’t you think? If the shopkeeper also had to pay the owner large amounts of money to “approve” anything, and only allowed the owner’s lackies to do the work, wouldn’t they’d be doubly annoyed?

            “they were more than welcome to go retrieve those fully-depreciated, electronic boxes of theirs sitting in Telstra’s exchange.”

            That comment just highlights your ignorance of what is required to install a non-Telstra DSLAM in an exchange.

            “Millions of dollars? – really? lol”
            Yes. At least six providers each paid massive amounts of money to Telstra for access to the exchange.

          • *If a shop fits out the shop then the owner decides to terminate the lease (and not pay a penalty) the shopkeeper would be rightfully annoyed (to say the least), don’t you think?*

            why do you assume the shopowner is turfing out the tenant prior to expiration of the lease? how is any penalty payable if the tenant is turfed out at the expiration of the lease or the lease provides for early termination?

            *If the shopkeeper also had to pay the owner large amounts of money to “approve” anything, and only allowed the owner’s lackies to do the work, wouldn’t they’d be doubly annoyed?*

            why would Telstra want multiple teams of techies of uncertain training and qualifications fumbling around with their infrastructure when any resultant disruption to service could result in payment of millions of dollars of compensation under CSG?

            *That comment just highlights your ignorance of what is required to install a non-Telstra DSLAM in an exchange.*

            these ISPs made a business decision to install DSLAMs in Telstra exchange and they should be well aware of all the risks that these decisions entail. are you seriously suggesting that we should let a bunch of greedy cherry-pickers’ relatively miniscule DSLAM investments get in the way of infrastructure upgrades?

          • Steven you are forgetting that the reason in the first place why Telstra is putting FTTH in the South Brisbane area is that the government wanted to demolish the exchange and build a hospital there, so Telstra’s land asset and lease (the exchange) is getting destroyed.

            The payment you are referring to is a reimbursement for that land (and the whole agreement is quite complicated, because Telstra does need to pay quite a bit off that many back, a lot of it is a loan)

        • “By contrast, ISPs with millions of dollars of investments in the exchange”

          Millions of dollars? – really? lol

  4. what “distortive market power”?

    Telstra lost the prerogative to set the prices of its wholesale products a long time ago. instead, it’s all determined by faceless technocrats and rogue regulators at the ACCC. they can’t even prevent the greedy access seekers from cherry-picking their infrastructure to death and leaving the unprofitable bits for a USO-burdened Telstra to serve and carry the losses.

    in terms of South Brisbane, the ducts are open for everyone to use. Telstra has zero “market power” advantage in laying fibre in SB as the building of fibre networks is currently a competitive market (but will cease to be under Labor’s NBN) and they are plenty of private operators building fibre networks.

    since Telstra built the brand new fibre network in SB with its own private funds, there’s no reason why it should design or build the network to cater for the business models of other competitors that haven’t sunk a single dollar of their capital in the new network. as someone else has already pointed out, that’s like expecting the Toyota dealership network in Australia to service Kia Motors’ cars.

    • No wonder you love FTTN so Tosh (or is that Rod)…?

      Obviously you still live in that 2005 Telstra./NWAT gingerbread house, where the “rogue regulators and horrible foreigners from Singapore” are the enemy and poor Telstra are the Mary Poppins of Australian business.

    • Tosh, why do you cling to this idea that competing infrastructure is somehow a good thing?
      You’re also wrong – there are zero companies rolling out fibre to the home networks in brownfields. In CBDs we have fibre available for big businesses only – this will still exist under the NBN.
      Ducts are not open to anyone – you pay Telstra and they might let you use theirs.

  5. i think the problem here for Internode/iiNet is that the layer 2 bitstream declaration only applies to superfast networks coming into existence after 1 Jan 2011.

    presumably, work on the construction of the SB fibre network began in 2010, so it came into existence before 1 Jan 2011, hence the CCS Act does not apply to it.

    i was just laughing reading Herbert Greer’s subsmission to the ACCC (on behalf) of Internode/iiNet where they tried to invent their own “regulatory principles” and introduce terms such as “fundamental principle”, “replacement network” and “captured network” and effectively trying to make up the law as they go along…. all in vain, because the provisions of the CCS Act clearly only apply to superfast network coming into existence in 2011. all the submissions and fanciful invention of regulatory principles in the world isn’t going to change THE LAW.

    and Internode/iiNet weren’t just trying to forcibly include Telstra’s SB fibre network under the purview of the CCS Act. true to form, they also tried to argue that Telstra Velocity estates which were built years ago should also be regulated under the “layer 2 bitstream” declaration (which is designed to regulate post-2011 networks)…. LOL… not suprisingly, they will use every opportunity for an ACCC submission to get their grubby hands on every piece of Telstra infrastructure they haven’t built or funded.

  6. The reason other ISP’s are having their customary whine is they are losing their cheap access to Telstra plant and equipment, and have to now pay market rates. There is nothing stopping ISP’s redeploying their DSLAM’s – hey, they could now install them in country areas they previously avoided!

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