No matter who wins the election, here’s why Telstra should build the NBN

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blog The issue of how the National Broadband Network should be rolled out is an extremely fraught and highly debated one. But one thing has become very clear over the past several years: The rollout has not progressed as fast as Labor said it would; in fact, far from it. One reason for this may be that the organisation with the most expertise in rolling out telco networks hasn’t participated in the construction effort, unlike in virtually every other country in the world. As I write on Delimiter 2.0 (subscriber content) this morning, if we want this rollout to happen, it is definitely time to turn back to Telstra to get this thing done. Here’s a paragraph from behind the paywall:

“Doing a deal with Telstra can often seem, according to people who have done so, like sitting down to dinner with the devil. But in this case, when it comes to the telco being contracted to conduct much of NBN Co’s network construction work, it’s starting to seem more and more like a match made in heaven.”

Without going into the specific arguments I make in the article, I think Australia hasn’t debated Telstra’s potential involvement in the construction of the NBN enough. It’s time we started talking about this again. Rolling out network infrastructure is Telstra’s speciality, and it is certainly more qualified to upgrade its own copper network to fibre than any other company in Australia. Both sides of politics need to start thinking about this again, fairly seriously.

Image credit: Telstra

63 COMMENTS

  1. Agreed with the following proviso before any such deal be made – Telstra be cleaved in two.

    1. Natural monopoly infrastructure selling wholesale access to services;
    2. Competitive non-monopoly infrastructure and services arm.

    Amalgamate (rather than “contract out”) the first arm with NBNCo.

    • Whilst I agree with you, it isn’t Telstra then, so what benefit do they gain from it?

  2. Huh??

    The whole reason Telstra was bypassed in the first place was that they didn’t want to do it as it would a) require separation, b) couldn’t give up the copper given their then overreliance on it to make shareholder returns while NextG was being rolled out and c) from memory put a stupidly high price on it anyway?

    Without reading the 2.0 article I don’t know if this is covered but wouldn’t a reason the NBN hasn’t progressed as fast as it ought be due to the poor state of Telstra’s pits and ducts and all the contractors having to remap the network for Telstra before they can get one with actually running the fibre?

    A slightly different tack is how is Telstra going to make any better progress with it’s line technicians already at breaking point dealing with copper repair work? They’d need to hire more technicians which the other NBN contractors are already fighting for. The fibre splicing machines may also be in short supply but you would think Telstra already has a quantity of these on hand.

  3. Are you talking about Telstra being contracted to construct it and the infrastructure still owned by NBNCo? Or Telstra actually taking ownership of the infrastructure as/after they build it?

    First one I have no problem with.

    Second one is a stupid idea.

      • I’d hate to think what the quote would be like. With Telstra gouging, it’s likely a lot more than $94B :)

        • Telstra would double-to-triple charge what every other company would charge for the same service, i.e. precisely how they charge all their residential and business customers.

  4. Woudlnt tesltra have the same opportunity to tender for the contruction work as everybody else?

    If so then isnt the whole thing moot!

    they made a commercial decsion not to tender, besides contracting them directly how can they be given this role (which is against eth mantra that the open market can get things done efficently etc).

  5. Just veering off slightly… this again demonstrates the folly of a) privatising Telstra and b) doing it half arsed.

    I agree with Clive Palmer when he was talking about the NBN shouldn’t be privatised, when he says –

    “I don’t think it is a good thing to privatise things that we have government for — the reason we have government is so that we can do certain things better together, than we can do them separately — such as health, schools and education, and defence,” he said.

  6. Even I don’t care who builds it, as long as it is done competently and within the allowed (reasonable) budget. The only problem I have with Telstra doing it is the potential conflict of interest – having the NBN built by the company that stands to gain the most from its failure seems like tempting fate. Telstra also have a conflict of interest in the timely and honest reporting of problems with the rollout resulting from inadequate maintenance or poor design of the CAN – there is no such conflict with any of the other NBN contractors. And before you accuse me of spouting ‘conspiracy theories’ there is plenty of evidence of Telstra protecting it’s own interests to the vast detriment of Australians and competitors in the past; what reasons do we have to believe that culture has suddenly changed? Reminds me of the scorpion & frog story…

  7. i’ve had nothing but issues trying to get telstra to install and adls2 line in nsw atm..

    them and the nbn ? no thanks…

  8. As long as they are contracted with specific clauses for delivery and penalties for non-delivery, I don’t have an issue with them do so.

    It will almost certainly cost NBNCo. more than now, but if it gets the rollout done faster, I also don’t have an issue with that. The Coalition might though, if they are to ask for FTTN….

  9. With respect I suggest whistling Dixie.

    Consider the time and cost of Bris South and the end product, consider Telstra has been responsible from day 1 since the agreement for not only pit, pipe and duct remediation but also the asbestos issue.
    Their project management in those areas have been far from exemplary and have been major contributors to NBN’s delays and the contractors problems.

    I note with interest they are continuing to delay recommencement with glib excuses, what is the result apart from bankrupting and financially destroying many subbies.

    Once Libs are in , rollout has already effectively been halted, minimum work done and maximum copper to lease to Malcolm (They will ask top dollar to sell, but lease and maintain and repair with lovely booster clauses and make an absolute mozza), also the resultant NBN would be unsaleable to anyone but Telstra as the key infrastructure would ALL belong to Telstra and they would have the Nation by the throat for ever. Like a chess game work out the alternative possibilities.

    Telstra has been playing hardball with a long term game plan that is golden for their employees and shareholders and a long term disaster for Australia and the rest of it’s economy.

    IMO poor old sucker Malcolm and the LNP have been so easy to suck in and play like a fish, Telstra’s Alan Bond

    They may well be able to expensively handle a relatively small project compared with the NBN, but I am very doubtful of their capability on the whole project compared with the team that has been doing and learning

  10. Unbelievable!
    It’s agreed that the current copper network is a god-awful mess.
    And you seriously recommend handing over the installation and maintenance of the NBN to Telstra, who have proven themselves incompetent in maintaining a network.

    Is this now a comedy publication?

  11. Well at the risk of getting slaughtered on-line, I was part of the Sol Trujillo team at Telstra a few years ago. There was a plan to implement FTTN for roughly 90% of the Australian population within two years at no cost to the taxpayer. The issue at the time was driving shareholder value for Telstra as opposed to having the network being brought under the government control. That is still the issue with using Telstra, there is no value for Telstra to do the work and then hand it over to the government.
    So I wonder, 5 years later when Australia is actually going to get something that doesn’t cost the taxpayer $45million??

    • @Drew Guttadore

      That only tells half the story Drew. You make the 2006 FTTN proposal look good. But in fact, at $80/line wholesale and a (someone correct me if I’m wrong) 6 year freeze on no-ULL agreements on FTTN using ADSL, it would’ve seen Australian broadband prices skyrocket well beyond even the highest NBN plans for 12-25Mbps and they aren’t guaranteed speeds. They’re “up to” unlike the FTTP NBN.

      Telstra have had their chance to fairly offer a decent service for a decent profit. They chose to attempt to take the taxpayer for a ride and the government and ACCC refused. Quite rightly.

      • Telstra intends to make a profit, the NBN has Buckley’s chance of ever doing so. I’ve done the math for you a number of times.

        • And we have responded to the “math” even more times, and you sir, have yet to respond. Why is that?

          In fact, Tel, I have rarely seen you respond, especially to direct criticism made against your posts at all to in recent times.

        • @Tel

          My spreadsheet must be broken. Maybe Microsoft Excel has a bug, because mine here says, even with a 2 year delay and spending another $5 billion, they will still come out well above the bond rate over their business plan assuming their estimates of takeup prove correct. If they’re exceeded, as numbers are beginning to suggest, NBNCo. will be a cash machine.

      • They’re “up to” unlike the FTTP NBN.

        Just like Albanese’s gigabit speeds are “up to” as well, huh?

        • @Tel

          Nope. Context is everything my friend. You know as well as I that the “up to” in that sentence is because of the medium upon which it is based- copper- and its’ inherent limitations- line length and quality.

          The “up to” in fibre is simply a matter for retail providers and the ACCC has already said they’re gonna take a no nonsense stance on that. The network itself, while not capable of 1:1 contention, at about 1.7:1, is so far beyond any serious contention issues, it may as well be non-existent.

          • It’s called “contention” and neither Alabanese nor anyone in the ALP can provide guaranteed gigabit to NBN customers. That’s the plain fact of the matter.

            Then there’s the upstream contention on top of that, which is significantly worse.

          • @Tel

            It’s called “contention” and neither Alabanese nor anyone in the ALP can provide guaranteed gigabit to NBN customers. That’s the plain fact of the matter.

            Firstly, while that is true now, when NBNCo. release their symmetrical plans for PTP (for which they’ve allow 6% of fibre per FDH for) they will be able to guarantee it. For a price of course.

            But, otherwise, you’re right. Depending on how you use guaranteed. You cannot guarantee 1Gbps on copper, under 95% of circumstances, even with G.Fast, because of the technical limitation and physics of copper. You can on fibre, in 100% of circumstances, assuming you have the data capacity to do so. That is the way I use guaranteed. Apparently Turnbull doesn’t. Fair enough, we have different definitions. But I would much rather be limited by network bandwidth than my own line. Considering the price of even highly contended 1Gbps when it will first come out….I don’t think many of us will have to worry about contention on the hardware for a while…unlike on the copper network.

          • at about 1.7:1,

            That’s just plain wrong. The ALP was promising gigabit network speeds, right in public to the people of Australia. The transcript is on the ABC right here:

            ANTHONY ALBANESE: We are absolutely. And important Emma, it’s 1,000 megabits, not 100 as Malcolm suggested that we …

            MALCOLM TURNBULL: You just said 100.

            EMMA ALBERICI: You said 100, sorry.

            ANTHONY ALBANESE: Well it’s 1,000 megabits per second …

            MALCOLM TURNBULL: So but you said 100, but you meant to say 1,000.

            ANTHONY ALBANESE: It’s 1,000 megabits per second in terms of the download.

            http://www.abc.net.au/lateline/content/2013/s3824057.htm

            So did you hear Alabanese say “up to” 1000? Because I can’t see it in the transcript anywhere. Yet when you calculate the contention ratio, you get 12:1 contention at the GPON level, and then always something worse once you get to the POP. Trying to pretend this is a legitimate claim is just ridiculous. He is selling “up to” bandwidth just like other people do, and no you don’t get to wave hands and say, “oh well, context you know”. The context was clear, Alabanese just wanted big numbers to wave in front of voters. That’s the context. You know it, we all know it.

          • Except not everyone will be on the 1Gbps tier and as 1Gbps gets more popular you’ll likely see NBNCo upgrade to 10GPON where demand is high.

          • So it’s OK to promise something that does not exist on the basis that it might exist some day?

            I rest my case: “up to” bandwidth… where “up to” means when we get round to building it.

          • Umm… 10GPON technology exists today, in commercial deployable formats. It’s just expensive at the moment.

            And isn’t that exactly what you are inferring with your wireless technology debate in another thread?

          • @Tel

            “Up to” is a fact of life in networks. The type of “up to” is just as important as whether you specify it or not.

            As I’ve already said, the “up to” on copper is a hard limit without shortening the line- physical works. The “up to” on fibre is a matter of electronics at either end. I know which one I’d rather have and I wouldn’t feel hard done by or cheapened if I only got 80Mbps of my 100Mbps some 10% of the time, compared to the 7Mbps of the 24Mbps I get 100% of the time, or even 45Mbps of my 80Mbps on FTTN 50% of the time.

            If you find that an unfair comparison of the upgrade of a network to inherently cope better with increased data (fibre)….well, I’ve said my piece too :)

          • Tel,

            you make OK points, but moderate your tone down — be polite. That is the first rule of Delimiter. Otherwise I will put you in the sin-bin ;) Have respect for other people.

            Renai

          • @Tel

            I think you’re starting to build on your own strawman here Tel. You’ve assumed all Australians expect to get 1Gbps 100% of the time if they chose that plan. Why would they? They don’t get 24Mbps now on ADSL. And on NBNCo’s own site, it clearly states you may or may not get that speed depending on your RSP. Just like ADSL.

            You’re conflating contention on a hardware level, which is so far from being a bottleneck it’s not funny, with speed limiting on a physical level, such as that on copper and FTTN, which is a real world problem almost all Australians deal with on a daily basis. That is a logical fallacy. One is a hard limit, unless you significantly shorten the copper, the other is a matter of managing multiple users and barring some services until further upgrades can be made to ensure QoS. It is standard network management.

    • The issue at the time was driving shareholder value for Telstra as opposed to having the network being brought under the government control.

      I think that pretty much sums up the issue of all private investment in Australia, although probably Telstra is a special case. The companies that do well are the ones that stay under the radar as long as possible, so their gains can’t be snatched. A behemoth like Telstra simply cannot stay under the radar, although I think they are positioning themselves well for future MIMO wireless technology and the surprising (to some) gain we will see in that quarter.

      • The companies that do well are the ones that stay under the radar as long as possible, so their gains can’t be snatched.

        So you believe a government should not take a fair share of tax from successful companies?

        although I think they are positioning themselves well for future MIMO wireless technology and the surprising (to some) gain we will see in that quarter.

        I think Telstra’s long term game is wireless for profit. That would mean running the network at peak spectral efficiency without outlaying high CAPEX for low return. MIMO is a good way to do this. However, it has very limited uses in dense populations. The problems with cross-spectrum interference in cities is well known and while I’m sure there will be a number of very interesting and useful breakthroughs, wireless will remain complementary to fixed line for the long-term foreseeable future. Unless you have some evidence otherwise?

        • MIMO is a good way to do this. However, it has very limited uses in dense populations. The problems with cross-spectrum interference in cities is well known…

          If you can build a physical dish to deliver tens of dB’s of gain and pinpoint a beam onto a target, then you can make a virtual dish to do the same thing, because as far as the physics and the photons are concerned nothing has changed.

          Building virtual optics may be at the limit of current processing power, but given the way computing hardware is falling in price, it’s only a matter of time. They are already selling MIMO access points for a few hundred bucks. Commodity off the shelf hardware.

          • What is wrong with you guy?

            These devices are being built and sold.

            Microwave dish technology is well understood and well developed, and 50 years old.

            The physics is done, go learn something. And the processing power doubles every 1.5 years.

          • I know what a virtual dish is, it’s an array of small antenna designed to replicate the functionality of a parabola. That is simple.

            That doesn’t explain how we can make a practical cost effective network of directed signals, assuming of course that one VD can adequate account for multiple incoming signals from multiple directions without suffering from interference losses, and that’s just one technical issue I have thought off the top of my head from what you’ll losely infering here.

            You have effectively taken a “buzz word” in the form of the technology and tried to say “Hey look at what we can do, this is going to kill the need for fixed line”. You’re far worse than an NBN “zealot” if you’re going going to sprout random advances at the edge of signal processing and networking and magically expect them to fix all of your problems after an undisclosed period of time, ignoring the fact there are advances being made to other technologies, like fibre.

            So are you going to elaborate, with evidence, with practical or theoretical implementations, and see what you get back, because I assure you, some of on this forum can actually play at that level, you just need to bring the ball. Don’t just post a few word answers and “tibits” and then run off, like you almost always do Tel.

            Engage in this discussion.

          • @Tel

            Leaving all the rest aside, which is speculation:

            They are already selling MIMO access points for a few hundred bucks. Commodity off the shelf hardware.

            Have you used one? On my router currently I have MIMO turned off. Why? I got unstable peaking speeds with it on during file transfers. I get stable, albeit lower average speeds, with it off. MIMO is inherently difficult to manage. That isn’t to say it doesn’t have a place- of course it does. But it is far from any sort of saviour or magic pill to solve our spectrum crunch.

  12. From what we are hearing and seeing about 30% of homes are delayed mostly because of issues with the existing infrastructure, quick dirty jobs, unusual pathways, no logical approach to installation etc.

    …infrastructure that was installed and ‘maintained’ by.. you guessed it….Telstra.

    Just because they’ve got the record for doing it. Doesn’t mean they’re the right people to do it.

  13. If Telstra are unable to even prepare/repair their own pits then why should they have a larger roll?

  14. I thought Telstra was already rolling out its “Velocity” fiber network, avoiding GPON and using an easily upgradeable “home run” topology. Do it once and do it right as they say… why take a step backwards at this stage?

    Can’t see any reason why Telstra would see advantage in picking up the pieces after a government disaster. The majority of high speed Internet (check the ABS) is still private in Australia by a long shot, so don’t sweat on it, the rollout is coming, it just won’t be NBN.

    • I thought Telstra was already rolling out its “Velocity” fiber network, avoiding GPON and using an easily upgradeable “home run” topology. Do it once and do it right as they say… why take a step backwards at this stage?

      Umm, as far as I know, Velocity is GPON…..

      Can’t see any reason why Telstra would see advantage in picking up the pieces after a government disaster.

      Return to monopoly?….

      The majority of high speed Internet (check the ABS) is still private in Australia by a long shot, so don’t sweat on it, the rollout is coming, it just won’t be NBN.

      If you count HFC, yes. If you only count fibre, NBNCo. has now rolled out more fibre than is already available in Australia ( to approx. 200K premises) if I’m not mistaken. Not to mention the wireless portion which is faster than most ADSL too.

      • Return to monopoly?….

        The NBN has always been an attempt at a government sponsored monopoly on fixed line communications. It was designed that way from the ground up.

      • Umm, as far as I know, Velocity is GPON

        OK, I did a search on that and lots of people do report that as a passive splitter style network. I admit I have never seen one close up, just going on what I can find with a search.

        Anyhow, all passive splitter networks are fundamentally a shared medium, and thus they are contended. In other words “up to” bandwidth. Worse, the demarcation cannot be divided down to a premises by premises level so you always have some guy controlling the network and everyone else becomes a reseller at best.

        So NBN is not vertically integrated… so who cares? You can have any name at the top of your bill, just like you can have any name on your electricity bill… and still pay the same price. The competitive market you have when you are not having a competitive market.

        • @Tel

          Yes then, Velocity is GPON. Thank you.

          Secondly, of course GPON is contended. Who ever said it wasn’t? I don’t ever remember Albanese or Conroy before him saying GPON could deliver a “guaranteed” 1Gbps to your home as Turnbull harped on about on Lateline. Trying to explain to your average punter what contention is is fruitless. And GPONs contention, in the design NBNCo. use, is minuscule on anything up to 100Mbps. It is less than 1:1 (when you take into account only an average of 14 fibres per splitter of 32 are used to begin with) up to 170Mbps per user at that rate. Yes, if a business or bleeding edge user takes 1Gbps, they significantly increase contention. That is for NBNCo. to manage and keep below 70% utilisation as per their own designs. It’s not difficult with the modular design of their network.

          So NBN is not vertically integrated… so who cares?

          I’m just gonna leave that there. With one statement- Telstra and the last 2 decades of telecommunications.

        • Tel
          Think outside the box.
          Read the comments
          http://delimiter2.com.au/nbn-can-we-trust-either-side/
          That GPON you deride, when allied with the multiport NTU provides the framework for innovation and development that transcends the constraints of a single data stream service. Enables development and innovation and inspiration where design for the lowest common denominator is no longer an essential part of the equation. In other countries they have to work to those constraints and there will be many thousands doing so – extremely competitive.
          However in Oz it would have been working to a LCD of up to 100Mb , where few are working, the opportunities and the success in those areas would have driven demand for the higher capacity World wide (product that uses that 100Mb+) and we would have had the head start.
          Too bad we stay risk averse conservative followers and lose our opportunities, but why?

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