BT FTTN rollout shows what Australia could have had


full opinion/analysis by Renai LeMay
31 July 2013

opinion/analysis The success of the fibre to the node rollout deployed by British incumbent telco BT, despite its many and obvious flaws, must come as a stark reminder to Australia’s politicians, telcos and regulators of what could have been achieved in Australia over the past eight years if the various players had stopped their incessant, poisoned infighting on the broadband issue and actually got together to make things work.

In November 2005, then-Telstra chief executive Sol Trujillo, who had only stepped on board that July, presented what was at the time a highly ambitious plan to upgrade Telstra’s fixed-line copper network with fibre to the node technology.

At the time, despite all new market dynamics that had emerged in the years since the Howard Government-backed deregulation of the market in 1997, Australia’s broadband sector was still incredibly immature. With the rollout of the HFC cable networks by Telstra and Optus half a decade before largely stopped due to unresolved duplication issues, a new cadre of ISPs led by iiNet, Internode, TPG and others had started deploying ADSL infrastructure directly into telephone exchanges.

The goal at that time was to forcibly unlock the power of Telstra’s copper infrastructure through wresting control of it from the incumbent at the exchange layer. Over the years, the telco’s cadre of ISP challengers would succeed in first removing Telstra’s artificial 1.5Mbps ADSL1 speeds and allowing new theoretical maximums of 8Mbps; ADSL2 speeds at up to 12Mbps soon followed, and eventually the full potential of the ADSL2+ standard delivered speeds up to 24Mbps as standard across the nation.

Witnessing this rollback of Telstra’s market power and also being cognizant of what other global telcos were doing with their own infrastructure (the executive had direct management experience at telcos in both the US and Europe), Trujillo realised what few others in Australia’s telecommunications industry did at that point: Telstra’s copper network would eventually need to be upgraded, and that upgrade would become a matter for national debate, with the Federal Government inevitably stepping in somehow.

So Trujillo decided to get ahead of that inevitable tornado; creating his own vision for Telstra’s copper network, in an attempt to frame the debate along the lines Telstra desired.

The executive’s vision at the time (as detailed in this ancient-looking series of Powerpoint slides) called for the telco to deploy some 20,000 fibre to the node modules around Australian capital cities, upgrading 450 telephone exchanges in the process and taking other steps to ‘condition’ Telstra’s copper network — removing 7,500 of those troublesome pair gain modules and other network pieces that frustrated end user broadband speeds.

The impact of the deployment — be carried out in three years and be completed by the end of 2009 — would be remarkable in terms of fundamental broadband service delivery. Some four million premises — about a third of the total Australian premise footprint of 12 million — would receive guaranteed broadband speeds of 12Mbps. The remaining premises wouldn’t receive the guaranteed FTTN speeds, but many would have ADSL2+ modules placed in their local exchanges, providing a decent boost to broadband speeds.

By 2005 standards, when most Australians were having trouble getting speeds in excess of 1.5Mbps, and many had no broadband at all, it was a fantastic plan. It would provide an immediate speed upgrade to much of Australia and do so quickly — within three years. And, of course, as Trujillo was in constant contact with leading network vendors like Alcatel-Lucent, he was aware that the FTTN standards were still evolving and that Telstra’s new FTTN network would eventually be able to be upgraded to provide much higher speeds — just like its ADSL and HFC cable networks.

But there was one small element of Trujillo’s plan which brought it — and the entire future of broadband service delivery in Australia for the succeeding eight years — undone.

Buried in the executive’s presentation to the media and analysts at the time was a small dot point. I can’t find the precise slide, but it said something like: “Subject to favourable regulatory conditions.”

What this meant, in practice, was that Telstra’s new FTTN network would not be open to competitive access. The telco would not provide wholesale access to Optus, iiNet, Internode or TPG so that these challengers to its throne could install their own equipment in its FTTN rollout, and it would not resell services to these companies so that they could target customers with FTTN-based broadband. In short, Trujillo’s FTTN was nothing short of an attempted re-monopolisation of the telco’s copper network — one which would lock out its competitors forever. Of course, the Howard Government of the day vetoed the plan; and it’s a very good thing it did. The Government cannot, and should not, allow one telco to dominate Australia’s broadband market.

However, the revelation of the success of a very similar initiative undertaken over the past half-decade by Telstra’s equivalent in the UK, BT, does cast a new light on the FTTN network proposed by Trujillo back in 2005, and how that network might have evolved, had Telstra not proven so recalcitrant about providing open wholesale access to it.

The similarities between Trujillo’s plan and the BT FTTN rollout started in 2009 are quite startling. Like Trujillo’s plans, the BT rollout, dubbed ‘Infinity’, was a fibre to the node upgrade initiative conducted by an incumbent telco in a first-world nation, involving an incumbent telco which already owns its own copper network and all associated infrastructure, and which already has thousands of engineers in the field to help deploy new infrastructure.

Like Trujillo’s plan, it initially appeared that BT did not intend to allow competitive access to its infrastructure. It wasn’t until 2010 that UK regulator Ofcom announced that BT would be required to provide open access to its fibre infrastructure, in the same way that telcos such as Optus, iiNet and TPG access Telstra’s network in Australia.

And like Trujillo’s plan, BT’s intention was to use the infrastructure to provide a substantial fundamental broadband service delivery boost that would also allow other services such as subscription television to be bundled. By 2009, when BT started deploying its network, the FTTN technology it is using was allowing much higher speeds than in Trujillo’s day at Telstra — BT Infinity currently offers plans up to 76Mbps — and as Telstra does with its own networks, a major new planned feature of BT’s FTTN offering is its new sports TV package, to be delivered via broadband into consumers’ homes.

The important thing to realise about BT’s rollout also, with respect to Trujillo’s FTTN plans, is that the BT rollout is definitely succeeding.

Last week, BT announced that its fibre to the node network has passed more than 16 million premises since the network rollout was commenced in 2009, with more than 1.7 million customers having signed up for active connections to the infrastructure. It is also working directly with the UK Government to extend the network to rural areas, and it is also working on live trials of the new vectoring standard, which will allow speeds of up to 100Mbps on its FTTN infrastructure. It is also offering fibre to the premises extensions, which, at a cost (modest for businesses, pricey for consumers), allow customers to have fibre laid all the way to their premise (FTTP), delivering even better speeds of up to 330Mbps.

This UK example paints a very clear picture of where Australia could have been if the Federal Government and Telstra had been able to come to an arrangement (probably with the assistance of Telstra’s key regulator, the Australian Competition and Consumer Commission) about allowing some form of open access to Trujillo’s planned FTTN rollout. If that scenario had come to pass, then, Australia, like the UK, would now very likely be enjoying FTTN broadband speeds up to 76Mbps in major cities around the nation, with millions of premises signed up and the technology still evolving to provide faster speeds. It’s an extremely tantalising vision of what could have been, if the nation’s telco executives and politicians hadn’t been so unable to work with each other on outcomes for the furtherance of broadband in Australia.

Because of this lack of cooperation, what Australia has ended up with over that period is … virtually no improvement in fixed broadband infrastructure over that period. Patches of Australia now have ADSL2+ that didn’t, Telstra and Optus have upgraded speeds on their HFC cable infrastructure (but not extended their rollouts) and the availability of 3G/4G mobile broadband has partially resolved many broadband blackspot issues. But the underlying problem remains, and it’s a huge one — Australia’s fixed-line broadband infrastructure still needs upgrading.

Of course, there are also hugely negative caveats with regards to BT’s rollout in the UK — caveats which would have applied to any Australian FTTN rollout by Telstra as well.

For starters, although BT’s FTTN is technically open to competition, in practice rival ISPs have struggled to be able to get the service to market in a timely manner, meaning that of the 1.7 million customers connected to BT’s FTTN infrastructure, 1.5 million are customers with BT’s retail division. This situation has been worsened by the fact that, according to retail ISPs such as TalkTalk, BT, like Telstra has done on occasion in Australia, has driven down its retail prices to the point where other ISPs are finding it hard to compete, even though they’re using the same infrastructure.

There is no doubt that, had Trujillo’s FTTN network been allowed to proceed, that a similar situation would have eventuated in Australia. You can see this both through the fact that Telstra still maintains a massive share of Australia’s current broadband network — despite the strong competition in the local fixed-line broadband sector — as well as the market dynamics of a local sector where Telstra has been largely left alone to do what it wished — mobile. In Australia’s mobile landscape, where it is not forced to provide wholesale access to its infrastructure, Telstra is currently bringing back millions of customers into the fold and winding back competition rapidly, as both Vodafone and Optus have largely failed to substantially challenge the incumbent’s dominance.

Then too, the poor quality of BT’s copper network in some areas (sound familiar, with respect to Telstra?) has drastically limited speeds in some customer connections. And, due to the particular rollout style which BT has used, where the telco has left its existing copper in the ground and only connected customers to FTTN when they explicitly ask for it, there are questions about the future upgradability of the network, especially in the long-term, with telecommunications experts globally predicting an all-fibre future for fixed broadband networks. BT is going down that track — but there are countless roadblocks in the way, as former BT chief technology officer Peter Cochrane has very publicly highlighted. If Trujillo had been allowed to proceed with his network rollout, questions would be being asked right now about how and when that network would be upgraded to FTTP, as well as any and all of the possible steps in between.

These caveats are huge ones — massive problems which British politicians and telecommunications regulators will need to take drastic measures to deal with over the next decade.

However, they are by no means insurmountable. And there is no doubt that when you look at the fundamental question of which country has better broadband service delivery, the United Kingdom is leagues ahead. It has mostly succeeded in upgrading its legacy copper network and providing faster services to millions of premises, which Australia has not. It has done so with minimal government funding, which Australia has not. There is funding cooperation between major telcos and the Government on rural broadband, which Australia does not have.

And meanwhile, the UK enjoys all the other advantages Australia does — competitive, 3G/4G mobile networks, universal satellite access, a HFC cable network across much of the country, open access for retail telcos to its incumbent’s copper network, and so on. There is really nothing which Australia has that the UK doesn’t, in terms of its broadband infrastructure — and there is a lot they have that we don’t, all because their Government and incumbent telco were able to come to terms on upgrading the national copper network.

Well, you might say, what about Australia’s National Broadband Network?

If Labor’s NBN project is rolled out as planned, in the long term it will surpass BT’s FTTN rollout on every measure. Its all-fibre technology is vastly superior on any measure to the half in/half-out approach used in FTTN; it won’t suffer the same competitive issues as BT’s rollout has, with non-incumbent telcos such as iiNet grabbing large sections of early market share on the NBN. It will be future-proof for at least the next 100 years or so, and it will also make a long-term return on the Government’s invested capital, as well as providing the Government with a substantial asset which could be later partially or fully privatised.

However, so far, the NBN has abjectly failed to deliver. Substantially delayed by lengthy negotiations with Telstra over access to its infrastructure and customers, as well as by changed requirements around greenfield estates rollouts and extensive problem with NBN Co’s construction contractors, right now the NBN looks to many in the industry like a lame duck. 207,500 FTTP premises passed in the same four years that BT has passed 16 million is rather pathetic by anyone’s measure. And to cap it all off, if the Coalition wins the upcoming Federal Election, the NBN will lose many of its technical advantages as an Abbott administration returns it to the same FTTN model which BT has already largely implemented, causing chaos and yet more delays.

I wrote in September 2011 that the one thing Australia desperately needs is stable telecommunications policy:

“… in large part it is the ridiculously unstable telecommunications regulatory environment which Australia’s incessantly warring politicians have gifted the nation with which has held us back in so many different areas over the past decade, and will continue to hold us back over the next five years if the two pathetically similar sides of politics cannot come together on a joint proposal. One, perhaps, founded on bringing many of the aspects of Labor’s visionary NBN project and the Coalition’s more targeted policy (which, as we have already noted, has many positive aspects) together.”

“If Telstra had been separated five years ago, if the bush had received wireless broadband, if competitive rural backhaul links had been funded and if Labor and the Coalition could have agreed on a way in which to invest public money in broadband in a moderate fashion which would suit both sides of politics and stimulate competition in the sector, right now Australia’s broadband landscape would look very different than it does today.”

“The long-term nature of infrastructure investment and the squabbling of the past half-decade has made it increasingly clear that a bi-partisan approach to telecommunications policy is needed in Australia. The only difficulty may be convincing our arrogant, indecisive, stubborn and incredibly own-party blinkered political leaders that they should sit across the table from each other and discuss the issue like adults. At times they appear to forget that they are all employed by the same person — the Australian taxpayer.”

The consequence of this lack of vision and cooperation by both sides of politics, as well as our telco executives and regulators, is that the UK, through BT’s FTTN rollout, is far ahead of Australia in terms of fundamental broadband service delivery improvements. And the really tragic thing is that Telstra could have done what BT did; Australia could have had what the UK has. And we would have had it sooner — because BT didn’t even propose a FTTN rollout until 2009, while Trujillo gave it a punt back in 2005.

The NBN is a very nice idea. FTTP is a very nice idea. And it may still deliver on its promises over the next decade. But the NBN’s promise, and, in fact, the promises of Australian politicians over the past eight years, have failed Australians thus far. Most Australians still have very similar broadband in 2013 that they had in 2005. But in other countries such as the UK, where the collaboration between the private and public sectors was stronger, residents and business owners already have something much better.


  1. First things first, i think my watch must be slow, cos this feels like a wednesday not a friday :)

    If you are doing these a little more often, that would be awesome.

    Now onto the important part, reading the article :)

    • heh yup — I felt like this topic deserved a little longer treatment than I was willing to do on Delimiter 1.0, and I also felt like rewarding subscribers. I really like this model — I’m really incentivised directly to produce great content and keep subscribers happy :) Hopefully I can do pieces a little more often than just once a week.

  2. How is having a Audit Report done in the UK with a 22 month delay as a success?

    And how does have having less than 20Mbps average in the UK as a success?

    Also comparing BT with Telstra is not Apples with Apples, it’s Oranges with Apples.

    BT was separated long ago and already had a Liberal goverment to rollout FTTN.

    The fact the Howard did not start any rollout at all shows the difference between Australia and UK.

    • hey Daniel,

      thanks for your comment!

      if you remember it was only the rural broadband part of the audit (the part where the UK Government is involved) which was criticised by auditors — the government auditors have no jurisdiction over the main BT rollout:

      I think comparing Telstra with BT is a good comparison. Both are incumbent telcos with similar infrastructure (although BT is obviously larger as the UK is larger). In addition, although BT was separated, as with Telstra, it wasn’t a ‘hard’ separation, and Openreach remains just a division of BT, similar to how Telstra’s wholesale and other divisions remain part of it.

      I agree the situation can be put down to the Howard Government’s complacency on the issue, as I wrote back in 2007:

      in your writer’s opinion, it was Coonan herself who left the door open for Labor to launch its extremely popular new broadband policy.

      The Communications Minister appears to have seriously underestimated public interest in the ongoing prospect of a new national fibre broadband network, first proposed in the current debate by Telstra back in November of 2005.

      Coonan has not provided enough government leadership at a time when the nation has been following every twist and turn of the competition regulator’s wrangling with Telstra, and to a lesser extent, its major rivals, about the terms under which a fibre network would be built. Conroy pointed this out one year ago, in an interview with ZDNet Australia. “I believe there is a role for the government in giving leadership in this. Because at the moment, everyone’s sitting around waiting for someone else to do something,” he said.

      As for the UK broadband speed … to be honest I don’t place much stock in overall average broadband speeds — I more focus on what products are available. BT’s FTTN service is substantially better than our ADSL networks are able to provide.

      Hope this helps!


      • Yes indeed, it was for the rural part of the rollout, but remember, what is classified as Rural in Australia? If we going to compare, then perhaps those in Band 3/4 are considered Rural in Australia?

        Also, I think I provided links before, but the Senate Committee suggested to rollout FTTP over a 10 year period as part of their results of their finding, you can read it here.

        John Howard had plenty of time of talking to promote policy in this area, since 2003/2004 when the report was commissioned.

        And 2003/2004 was not long ago in 2007.

        I use the broadband speed as the overall measure of the differences because that is what boosts our overall penetration of high speed broadband.

        • Very useful link. It shows that although the 76Mbps speeds are not usually attainable, average speeds are still much higher than available on ADSL.

          • One problem with trying to work out lines speeds from those stats. Take the upto 76Mb plan for example. They will not put you on that plan unless your line handles those sort of speeds.
            Sort of a self fulfilling prophecy. Of those that can get 60-70Mb, all of them get between 60 and 70Mb

          • This is a more recent one also


            Its true about the results being below 76 but you very rarely see a 100mbit speedtest on NBN either (96-98 depending).

            Overheads and issues on the consumer end will always bring down results when they are based on consumer end testing and not line sync.

            I remember a certain technology journalist getting very worked up on twitter about “congestion” on HFC when it turned out to be a wireless issue :P

  3. *facepalm*
    We could of had success, had the Libs implemented in circa 2000.
    Alas, hindsight is 20:20 and futile in reality unless we learn from it.

    • That’s kind of the issue now — I feel that few Australian politicians or telco executives are really looking at this whole situation in context.

  4. I think to some minor extent it is unfair to compare the BT’s rollout of 16million to the NBNs rollout of just over 200k.

    The UK has a lot of people all living in a small area, so when you pass 1 building, you end up passing a fairly large number of people (lets say 200).

    Here in Australia, even in the cities, when you pass 1 building, you are generally passing 1 household which probably has between 1 and 6 people living in it.

    I do admit FTTN can be rolled out faster (once you get past all the red tape such as Telstra Shareholders, the ACCC, etc…).

    • UK Audit said 6 months EU State Aid sign-off, so minus 6 months from 22 is?

      16 Months, almost the same time as getting Telstra Copper decommissioned over 18 months!

      • That’s all well and good, but that was the UK and EU. Lets see a similar thing happen here between Telstra, the ACCC and the Liberal party.

        It took quite a long time just to negotiate the current arrangement with Telstra for access to the pits and ducts, the Liberals want to go one step further and get the copper cable too.

        • Yes I believe that is called Section 51 (xxxi) of the Australian Constitution will be called upon. In addition to any other delay caused by Coalition Party “Audits”, “Reviews”, “CBAs”.

          • Personally I doubt Turnbull + Abbott would need to go to the constitution on this one — that would represent a worst case scenario where the courts might have to decide how much the Government would pay for Telstra’s copper network. I think it much more likely that the two sides will agree before that on a price — or even that no actual selloff of the copper network per se will occur — just terms to access it, as under the current NBN arrangement with FTTP.

        • I think you might be surprised at just how fast Telstra can negotiate, if the prospect of them seizing control of the NBN rears it’s head. Remember, it’s LNP dogma that the private sector does things faster and more efficiently than the public sector. (Which does have some elements of truth to it, despite there being plenty of examples where ‘faster & cheaper’ equates to ‘half the job’)

          • Except it does not state that in the policy document at all.

            They would be lying in goverment if that was the case (I believe).

          • They’re politicians. Lying is what they do. The only time they don’t is when they’re afraid that (a) they’ll get caught out, (b) the public will care, and (c) the media will bother reporting it.

          • “They’re politicians. Lying is what they do. The only time they don’t is when they’re afraid that (a) they’ll get caught out, (b) the public will care, and (c) the media will bother reporting it.”

            To be honest, I rarely catch politicians lying right out — usually they are mistaken, or distorting the situation, rather than outright lying. Outright lies don’t tend to be tolerated by the media or the Opposition of the day. The name of the game is in distorting the facts and changing the framework of the debate …

            There are also quite a few highly ethical politicians. Ed Husic and Scott Ludlam are pretty good, Kate Lundy also. I’ve very rarely had a problem with any of them.

    • “I think to some minor extent it is unfair to compare the BT’s rollout of 16million to the NBNs rollout of just over 200k.”

      True, it’s not an apples to apples comparison. However, there is still a valid comparison to be made. I don’t feel that it’s legitimate to simply ignore the very real difference between broadband services available in the two countries. Nothing can be precisely compared as we would like, but there is still some scope for comparison.

    • True Ray and a point many have forgotten is that B.T has existing infrastructure and that is more than just pits, pipes and copper. They had existing buildings , operational systems and billing systems and staff, the whole business and operational personnel, processes etc , backhaul, transits and points of interconnect.
      NBN started with MQ

      • I think it’s the existing infrastructure which has had a large part to play in the slow rollout of the NBN. Starting from scratch was a huge ask. Quigley has done an amazing job getting NBN Co up to speed, but still … one questions whether it was necessary, given what they have achieved in the UK.

  5. I think we could learn things from all the overseas rollouts. But the differences must be taken into account. Examples.
    New Zealand, what went wrong and why? Are we setting outselves up for a similar outcome?
    Germany. They had similar speed targets to Australia. They used many more nodes than we are to get to those speeds, and they are a more densly populated country. Are we underestimating nodes need to get to the targets speeds?
    BT. Don’t just use their headlines speeds as an example. Look at what people are getting. Does our thinner copper cause problems? High frequencies have much higher attenuation on thin copper. VDSL uses those much higher frequenies? Where can we find performance figures on a comparable copper gauge an look at the speeds over those distances?

    • I’d like to look into Germany and New Zealand (as well as, perhaps, other countries). Perhaps I will do so in future articles. I’m specifically examining the copper gauge issue at the moment; I hope to have an article on that next week.

      • Yes, the gauge can have a huge effect on attenuation at high frequencies. For example here is a comparison between (0.4mm and 0.5mm).

        Australia maostly uses 0.4mm and some 0.32 where they ran out of duct space. UK I have heard it’s 0.64mm (would be good to verify). The graph only goes to 10Mhz, the planned VDSL2 is 17Mhz, the difference between attentuations could be staggering. Even 10db is about 1/4 the signal strength, and it could be way more.

        • Hmm very interesting comment. But from my early research I’m not seeing that it’s going to be a huge issue, with 0.4mm being more or less something of an international standard, according to the information I have. I’ll add this info to my research as well.

          • “with 0.4mm being more or less something of an international standard, according to the information I have”
            Interesting statement. The only person I have heard say it that way is Turnbull. Excuse me if I’d like a more partisan source :)

      • A look into New Zealand would be interesting, this is the best resource I have seen.

        They used ADSL for the most part which I didn’t know, and generally a different style of rollout to what BT has done and the LNP have proposed, much longer copper loops.

        • Hmm. An interesting document, but I would think it would be possible to get more information from people directly over there — this is more in the line of a high-level overview.

  6. I think the US is a closer example of our Telco landscape. Over there, as here, the companies have been content to just sit back and make money off their aging infrastructure. It’s so bad, local councils and search companies have started their own fibre roll outs (like, but not not limited to, Chattanooga ).

    For some reason, competition just doesn’t work in telecoms…it’s failed in the US, and as you pointed out in your excellent article Renai, it’s also failed to a fair extent in the UK. I think one of the smartest things about how NBN Co has been setup, is the actual infrastructure will be basically controlled/reined in by the ACCC, forcing the company to wholesale to all comers at a set price, which will finally allow some real competition here.

    I blame the Liberal party for the way things turned out here. John Howard made one of the biggest mistakes in Australian telecommunications when he sold Telstra off whole….sure he got a better price for it that way, but he pretty well screwed over the “mum and dad” investors, as well as the Australian public. John Howard also ignored his own Broadband Advisory Group in 2003 that recommended an FTTN roll out ( ).

    Unfortunately, (if they win) they are about to make a very similar mistake again. Either by allowing infrastructure “competition” (like anyone can compete with Telstra?) or by Malcolm doing deals with the devil (Telstra) to get access to the full CAN, will just put Telstra back into the drivers seat in fixed line. And the way Vodafone is going, the Mobile landscape will shortly be back to a duopoly and be dominated even more by Telstra. The Liberal party just don’t “get it” when it comes to telecoms.

    Without NBNCo, there will be no real competition in Australia, no matter what Malcolm says he’d like to see here. And if they do implement FTTN, it will be many, many decades before we’ll see an upgrade to it…

    • Thanks for your kind words!

      I agree with pretty much this entire comment — +1 to it all.

      You’re right, competition doesn’t work in telecoms. It’s like building a road. Generally everyone will drive on the same road. If there are two roads, one bare dirt and one modern bitumen, then generally everyone will pick the modern bitumen, because the price difference to using it will be very little. You see this in telco, where consumers will consistently pick the best solution, because the cost difference is not that much. You see this in fixed broadband (where people tend to pick HFC, if HFC is not available they pick ADSL, if ADSL is not available they go for mobile) and in mobile, where people are migrating to Telstra’s network in hordes because it’s simply that much better.

      This means that the advantage in this kind of competitive landscape will always accrue to the company which can spend the most laying out the best infrastructure. And, of course, this will always give an advantage to incumbent telcos, which can leverage their existing infrastructure.

      I also agree about the Coalition. Seriously … Howard/Coonan should have separated Telstra before it was sold, and then incentivised it to upgrade to FTTN under an open access regime. The fact that they didn’t, landed us with the situation we have right now.

      And you’re also right — under Turnbull’s plan, it’s “back to the future” again. Back to FTTN, which most other countries have already moved on. Back to a market structure where Telstra remains the key player. Back to negotiating with Telstra all over again …

      Australian telecommunications sucks. And it’s not really even Telstra’s fault, as Telstra is essentially just maximising the interests of its shareholders. It’s the fault of our successive governments for not being able to pick a policy and stick with it.

      • The concept you’re both talking about is a ‘natural monopoly’ – basically, a situation where competition leads to higher prices, due to unnecessary cost in duplication of infrastructure. Roads, power lines, water mains, sewerage – all natural monopolies. The customer gets almost zero benefit from having two parallel services, but at twice the underlying cost.

        Re Telstra: my understanding is that the initial (non-separated) privatisation happened under Labor, so there’s fault on both sides of the fence.

        • T1 was in 1997, John Howard won the election in 1996. Keating floated the idea of a partial sale of Telstra pre-election (to pay for environmental reforms), though he lost the election before he could act on it, so the form of the Telstra sale was all John.

        • Yup — telecommunications is very much a natural monopoly situation. You see it all over the world. Regulators and governments have always struggled to deal with it. Right now, however, I’m actually not so much concerned about the state of competition as I have been. I’m more concerned about getting the fundamental service delivery improvements on board first. Competition, as long as there is reasonable wholesale arrangements, often comes in later. I expect we’ll see this with BT.

      • I also agree about the Coalition. Seriously … Howard/Coonan should
        have separated Telstra before it was sold, and then incentivised it to
        upgrade to FTTN under an open access regime. The fact that they didn’t,
        landed us with the situation we have right now.

        Yep, though I’m not sure “Telstra Wholesale” would have needed incentivising, FTTN->FTTP would have just been natural progression. It still would have had the natural monopoly problem that Bern mentions though, so it would have required pretty intensive ACCC oversight…

        • Yup. Precisely right. But at least, even if we did have to have very intensive ACCC oversight, at least we would have better infrastructure now.


  7. I think the thing that is frequently missed in all of this, is that FTTN really only works as a viable upgrade strategy, if you already own the copper. It’s the common denominator in almost every deployment, elsewhere.

    And I’m yet to find an example where are actively deployed fibre project, is reverted to Copper, let alone during a ramp up phase where the numbers are starting to rack up.

    This is a pain point for Malcolm, and he has to answer the question, sooner-or-later, because post election, Telstra is very very unlikely to simply hand over a profitable network for no cost.

    I’m not sure how well “sure, we’ll sell you the copper network, but it’ll cost you plenty” will be received.

    Telstra, the infrastructure owner, has actually attempted to recommend an upgrade to FTTN previously.

    That it also attempted to seek a re-write of the TPA, and that it was a pretty transparent attempt to stop infrastructure competition in it’s tracks, didn’t help sell the solution. At the time Sol was on a competition crushing vendetta.

    The Government of the day didn’t agree with Telstra’s assertions. So they took their bat-and-ball and went home. One suspects neither party would have had a bar of it, either.

    The world has moved on. I think it’s a little naive to suggest we can simply go back to that solution, albeit with some slight changes (vectoring) and perhaps a shorter copper run and have it work, nearly a decade later.

    FTTN would have been a great option, roughly 10 years ago. We’d now be at a point where fibre was the obvious next step. Right? In a few years it’d be being deployed. Probably not by the Coalition, though (it’d be someone else’s problem).

    Thing is, we skipped the first part. It seems illogical at this point to go back, to do it all over again in another decade.

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