news Shadow Communications Minister Malcolm Turnbull said yesterday that he believed Telstra would give a Coalition Federal Government its copper network for nothing under its existing contract with NBN Co, casting skepticism on critics of the plan who believe the telco could charge billions for the infrastructure.
Under the current $11 billion arrangement between the Labor Federal Government, the National Broadband Network Company and Telstra, the telco has committed to giving NBN Co access to its ducts, pits and pipes infrastructure, so that NBN Co can lay fibre cable alongside Telstra’s current copper cable. The telco has not committed to selling NBN Co its copper cable, nor has it committed to selling its duct infrastructure, but it has committed to transferring its customers onto the NBN as the new network is laid out.
However, under a Coalition Government, if the Coalition wins the upcoming Federal Election in several weeks, much of the copper in the network will be retained for use, with the Coalition planning to obtain access to the last leg of the copper between street corners and residences and offices, so that the Coalition’s ‘fibre to the node’ network can be rolled out.
Internationally, there is no known precedent for another company to gain access to this copper network for the purpose of rolling out fibre to the node; it is only incumbents such as BT in the UK, AT&T in the US, France Telecom in France and Deutsche Telekom in Germany which have upgraded their own networks to fibre to the node. Consequently, it is difficult to place a value on the infrastructure.
Despite this, however, the Coalition’s NBN policy document makes no allowance for extra funding to be spent on gaining access to Telstra’s copper network.
In an interview on Sky News yesterday, Turnbull was asked about the issue. “I want to ask what sort of deal Telstra can expect here, what are you willing to pay Telstra for access to that copper link?” host David Speers asked Turnbull. The full video is available online here and a transcription here.
Turnbull replied: “We’re not proposing to pay them anything. Telstra already has an arrangement with the NBN Co, a contract in fact, whereby they are being paid about $1500 for every premise as it is cut over to the NBN and they decommission their copper network. Their copper network in the context of an NBN world is of no economic value, it can’t be used anymore, so I’m very confident that we can acquire access, ownership if you like, of the last mile copper for no additional payment.”
“Telstra has a very significant vested interest in this NBN being built. They negotiated a very good deal and we’re not suggesting that should be altered or mitigated in any way but they want to get it built and of course they’re frustrated as everyone is by the Labor Government’s absolute failure to get the job done.”
In June, Telstra chief executive David Thodey described the company’s copper network as “perfectly OK”, noting that it could go on for being used for another hundred years. The network was broadly constructed over the past 100 years since the early 1900’s. However, then-Communications Minister Stephen Conroy accused Thodey at the time of talking up the value of the network, given that the Coalition was proposing to gain access to it.
Conroy said at the time, according to the Financial Review: “He’s doing what every CEO does, which is maximise the value of their shares. He’s sending a very clear signal that if there was a change of government, he is waiting for a mug named Malcolm Turnbull to come and buy that network. They will offload that for a pretty profit and Australians will be trapped using copper for many more years.”
The news comes as polls continue to show that the Coalition is on track to win the upcoming Federal Election, meaning that it is likely Turnbull will be Communications Minister in an administration led by Tony Abbott in only a few weeks. Senior Labor figures, such as Prime Minister Kevin Rudd and Communications Minister and Deputy Prime Minister Anthony Albanese, are continuing to heavily attack the Coalition’s rival NBN plan, alleging it will be akin to leaving Australians on “last century’s copper”.
opinion/analysis
Turnbull’s claim that a Coalition Government wouldn’t need to pay Telstra anything at all to buy or gain access to its copper network is, on the face of it, completely ludicrous. Frankly, even the physical copper in the network is worth something, and I have no doubt that many telecommunications industry observers, perhaps most, believe that Telstra will want some recompense for handing over its crown jewels. There’s no such thing as something for nothing, when it comes to Telstra, after all.
However, what I personally suspect is that Turnbull is able to make this comment because he has met with Telstra clandestinely on the issue, and believes he has something of a ‘gentleman’s agreement’ with senior executives, perhaps even Thodey himself, on the issue of the telco’s copper network under a Coalition Government. All of Turnbull’s language, including his body language when being interviewed, suggests this fore-knowledge. The Duke of Double Bay is a smart cookie. I don’t think Turnbull would be making this kind of claim without a great deal of background knowledge on the issue.
Will Turnbull turn out to be correct? … While it’s hard to know, I personally suspect that the Shadow Minister’s comments here will turn out to be quite naive. I’ve reported on Telstra for a decade now, and I’ve never yet seen the company roll over when someone wanted something for something it had. Gentleman’s agreement or not, I think Telstra will play hard ball on this one. It has a responsibility to ensure it gets value for money for its shareholders. The Coalition NBN plan clearly goes beyond Labor’s current vision in terms of the use of Telstra’s network. And I very strongly suspect the Federal Government will need to pay something for that.
In addition, we must also remember that Turnbull does not have access to the text of the extremely complex agreement between the Government, NBN Co and Telstra. It was never released publicly, despite the best attempts of Simon Hackett. Turnbull has given no signal that he has had access to the document under the Caretaker Conventions, or via any other method. Without such access to the legal contract here, Turnbull’s comments can represent nothing more than informed speculation — even if he does have a gentleman’s agreement with Telstra on the issue.
One final thing I would mention here. If Turnbull’s claim today turns out to be completely inaccurate, and the Coalition’s FTTN policy does indeed require the Government to stump up billions for access to or the purchase of Telstra’s copper infrastructure, I personally will crucify Turnbull in the pages of Delimiter for his mistake. Politicians don’t get to play games with billions of dollars of taxpayers’ money and wave away huge cost blowouts in their policies, without just cause. If Turnbull is wrong on this one, and remember that many industry observers believe he will be, at least to a certain extent, then I will remember that and hold the Liberal MP to account. These are serious matters and deserve serious consideration.
We’re watching: Mr Turnbull. You’ve made the claim now that getting access to Telstra’s copper for a FTTN rollout will require nothing extra than under the current NBN scheme. Let’s see how that claim will be tested in the real world.
Thodey would be absolutely derelict in his duty to his shareholders if he doesn’t play hardball on the copper for Turnbull’s FTTN build. Telstra are holding all the cards here, not Malcolm.
That’s fucking hilarious.
So how he thinks it will go is the coalition take power, dismantle NBNCo and all it’s contracts, he sits down with Telstra and they will simply hand over the ownership of the copper for free and that they won’t have to pay the $11 billion for the same agreement that Labor have on top of their $29.5 billion figure?
Umm, I think you misunderstood or may you worded that badly. Turnbull is assuming the $11b deal will cover reuse of parts of the CAN, i.e. it’ll be revised but Telstra will not request further compensation.
NO he thinks he can get the copper without paying more then the 11 billion already agreed on.
In his mind Telstra will get the 11 billion and he will get the copper for nothing extra
This is the same Telstra thats played hardball with every facet of government/legislation on running/holding on to its monopoly… yeah… that Telstra has no plan to re-negotiate the 11 billion contract on a critical asset of a network.
Honestly I don’t know which one is worse. The fact that there *may* be a cost blow out. Or the fact that Turnbull *may* have had an agreement already w/ Telstra… and these agreements usually end up being tax breaks/preferential treatment in exchange for the “loss of assets” so that they can claim its not a budget expense… because what an incumbent monopoly needs is more preferential treatment right?
Let’s be realistic here; Telstra will want more money but maybe not much more.
The copper network *is* worthless in an NBN world. The cost of dismantling it for scrap is more than it’s worth. It will sit in situ forever. For probably political reasons, the contract between Telstra and NBN Co avoids an actual transfer of ownership of the copper, but it’s effectively an agreement to write the whole lot off so the end result for Telstra is the same.
In fact, decommissioning the network is a cost to Telstra. They are the ones who have to do the physical cutover to the NBN under the current agreement. Under Turnbull’s they just turn the whole lot over and are done with it.
@Micheal: That’s a very nebulous “maybe” there. The problem here is the value of copper *is* subjective. You cannot say that copper is “dead” in an NBN world if 70% of your network has to *run* off the medium.
Maybe in 20 years or so when we have to transition from FTTN to FTTP the value of copper becomes “dead”. But at that point it’s all rather moot since that problem will be the NBN (or whoever owns/runs the FTTN part of the ‘NBN’) as Telstra would have sold it off by then.
In the meantime FTTN effectively increases the lifespan of copper as a must need medium for another 20 years. To say that 20 years of potential profit is “not much” would be stretching it slightly…
If the copper is worthless, why is the father of the internet adding some (dubious) value to the copper by putting nodes on it? Clearly it has value while it is still being used. Hence the expectation that Telstra might want its palm crossed with silver to forego that exploitation value.
It’s only “useless” under the Labor plan. It has a lot of value under Malcolm’s as it’s a critical component of it…
I tend to agree with a “gentleman’s agreement” of sorts taking place. It’s unthinkable that Turnbull would design a broadband policy without having spoken to Telstra about the costs of using their infrastructure. But on the other hand I also agree that its hard to imagine Telstra not playing hardball and getting the maximum profit they can, so this is certainly an odd situation.
Either Turnbull is incredibly naive (which we know he generally isn’t) or there is more to this than meets the eye.
If the additional cost of copper suddenly has to be factored in with the Coalition’s policy, then its an even bigger dud than we thought. Maybe a stupidly high price for Telstra’s copper will be the catalyst for Turnbull to change his mind, and proceed with Labor’s kind of NBN (I can dream can’t I? :) )
If there is some sort of gentlemen’s agreement then where is ASIC? Telstra, as a listed company, has a legal obligation to disclose this
The ASX rules are more fluid than people think … Negotiations on many things generally aren’t disclosed until they’re completed.
And if the negotiations aren’t completed, where does that leave any of the parties, including the electorate? Another opened ended promise to complete?
Hmm.
Would a ‘gentleman’s agreement’ on the copper involve Telstra getting ownership of NBNCo in exchange?
That way the govt doesn’t have to ‘buy’ it, and Telstra get to reestablish their wholesale monopoly…
It would certainly fit with liberal party ideology, of maximising opportunity for private profit in provision of public services.
That is my feeling on the matter.
+1
I’ve been thinking that T$ have been writing Lib policy on this for a while. In a situation where even a few extra $B payment to T$ for the copper would almost make the Lib plan as expensive as Labor’s – I don’t think there is any wiggle room at all.
To make a contract, T$ must be getting *something* in the way of consideration. Best case in MT’s position is that T$ get to charge mucho dollars for maintaining the last Mile of copper or worst case, MT gives T$ the whole NBN to run.
I note in the Computerworld Article that Australia is behind Mongola for upload speeds, 2.42mbps vs 10.40mbps respectively. We aren’t going to get 10.4mbps upload speed on any copper based solution that is available today. Just sayin’. http://www.computerworld.com.au/article/524805/australia_finally_beats_mongolia_internet_speeds_–_just/
I note that both Michael Malone and Simon Hackett have sold down a significant lump of their shares so that they no longer have a controlling stake.
I do believe that they both know that the writing is on the wall about MT’s options for the NBN should the LNP take control of the Govt at the next election.
Thats what I thought when I saw that.
I’d say that is pretty much the thinking on the Blue side of politics.
It’s not hard to imagine a conspiracy that goes;
1. LNP NBN gets built, to some degree
2. LNP NBN proves to be a dud, or has problems that otherwise “force” the government to sell it prior to completion
3. Telstra pick it up for a particularly low price, being the only ones that can both
a) Afford it at virtually any price (i.e. outbid anyone)
b) Stand to benefit from it at virtually any price (i.e. retain a monopoly position)
Would a ‘gentleman’s agreement’ on the copper involve Telstra getting ownership of NBNCo in exchange?
That way the govt doesn’t have to ‘buy’ it, and Telstra get to reestablish their wholesale monopoly…
It would certainly fit with liberal party ideology, of maximising opportunity for private profit in provision of public services.
Not only that, but that would turn the situation into something very similar to how other countries are doing it (incumbent rolling out FTTN). So a lot of good policy/legislation from Labor in restructuring and diversifying Australian communications (e.g. Telstra) going down the toilet.
Yeah … No.
No, as in one company running it all wouldn’t be a reversal of the current policy?
If they pay telstra 11b as planned, telstra will get all the payments for the pit and pipe access, without having to do any remediation past the node.
Telstra wins straight away under this plan, they wont pay a cent extra for the copper directly.
But telstra will still benefit from less remediation work, quicker cashflow and construction contracts.
quicker cashflow
^ this methinks ^
How will they be compensated for the loss of income. After all they are going to get the $11B one way or the other. At the moment however they are earning $200 odd dollars a year of each household.
Let’s say, to be generous, the current NBN rollout is linear to make it easier (it’s a ramp up really and that would make this dollar figure even higher).
$200 for an average of 4 years (half rollout, to give us an average figure over 8 years), that is $8B dollars, most of it in the next few years. Rolling out sooner does not Telstra money at all. Why get $1200 sooner when you are get almost 17% interest on it by waiting, not to mention that $1200 rising another 2.5% due to it being indexed to CPI, that’s near 20%.
Turnbull’s getting money sooner doesn’t hold water in my opinion.
“Their copper network in the context of an all fiber NBN world is of no economic value, it can’t be used anymore…”
FTFY.
The only reason the government could even begin to get Telstra to play ball was to make it clear to Telstra that they had no need for it and were very content with simply overbuilding Telstra’s infrastructure as needed. It’s sad that Turnbull can’t see he’s undermined the very basis for Telstra to work with him.
Naive? Some sort of conspiracy/backdoor deal? Tesltra actually wanting to proceed?
We might find out the hard way.
+1
People’s short memory spans coming into play again I guess…. People have forgotten the biggest problem w/ the original FTTN tender was the fact Telstra was more than happy to “overbuild” their own FTTN network against the government NBN plans at the time. In fact several interviews w/ higher ups w/ Telstra *confirmed* they were going to overbuild to hold on to their monopoly. And hence the non compliant bids.
The FTTP plan basically pulled the carpet underneath Telstra by saying – well we won’t need your infrastructure then WE (ie. NBN) will overbuild you instead w/ fibre. W/ the prospect of their own assets becoming useless as the build progresses they went to the negotiations table.
Interesting range of possibilities.
First off
Maintenance, fault finding and repairs. Is Telstra guaranteed a very fat “Maintenance Contract” for 30years which of course does not appear on M.T’s $29.5Bill build cost.
Consider the fault and maintenance depots and stores Australia wide, there is a whole section in Telstra devoted soley to this, or is all of this and the employees with their accrued benefits and super liabilities transferred to NBNCo.”?
The physical copper is but a small aspect of “the last mile of copper”
Also raises the point that once the copper is NBN’s the component of the $11Bill is due and payable as the customers are now cut over onto the NBN.
I was considering relocating to Keysborough (planned ready for service late 2013/early 2014),as was due for service within 12 Months but there has been no work since the asbestos issue, on mynbn that whole area is still stuck on remediation with no progress. Ideal convert to FTTN. Move discarded.
Note the Asbestos delays and why still on pause while subbies go broke and sell off their newly purchased equipment and quit the industry. Wait long enough and all the workers left in the industry will be qualified . Why not recommence in areas where the workers are qualified. So many questions and IMO increasingly suspect, but then maybe my years and experiences have left me less trusting and naive
As a resident of Keysborough I am saddened at how the work has completely stopped, and the map of proposed work has been shrinking month after month :( Consolation prize for you, Keysborough is a dump anyway
@Michael B. These where my very first thoughts as well.
Especially with this abstesos which will trouble Telstra alot. NOt having to work so much on those pits will save them alot of headache.
I’ve got a feeling it will pan out that the government will get free access/ownership of the copper in return for Telstra getting abigger slice of the NBN-related work and an ongoing contract for upkeep of the copper.
I could be wrong, but this makes sense. Just because Telstra don’t get paid in cash for the assett doessn’t mean they’re getting nothing for it. I’d say a long-term contract for NBN related work and copper upkeep/remediation might even be worth more than the copper for Telstra.
what im expecting is yes, Telstra will hand it over. then get paid to maintain it. nbnco wont have the staff to deal with it themselves. and regardless of how good or bad condition its in, it will need some maintenance.
“Telstra will hand it over then get paid to maintain it. ”
And guess who will *really* be paying for maintaining it? Yep. Mr Muggins Subscriber.
What’s to stop Telstra from pocketing the $11B for use of it’s ducts & customer transfers then continuing to charge everyone a monthly Line Rental for the access & use of the last mile copper?
Grump3 – that’s what’s happening now in South Brisbane & Emerald Lakes – Telstra charge everyone a monthly Line Rental
south brisbane IS TELSTRA. they can force you to have a phone on that if they want. their stuff, their rules. it sux, but its got nothing to do with nbn for either party
To all of those that have the belief that Malcolm Turnbull is the suppository of Broadband Engineering knowledge should have a look at his recent hangout interview;
http://www.youtube.com/watch?v=WUYhxkM2HvY&feature=player_detailpage
Watched tired old Malcolm with his tired old arguments, his machine gun mouth uttered the words “UNO,UNOW,YANNO” a total of 94 times in a 1 hour interview or 6 times a minute for the length of time he talked, sometimes the Yanno’s were repeated in a stuttering fashion like “Yanno Yanno”. Don’t know whether this could be described as English or whether he’s coming down with dementia or mad cow disease. He even beats Peter Reith’s record of “Yanno’s” on a couple of occasions. I once recorded Reith saying “Yanno” 13 times in a one minute period and Abbott saying “umm” “umm” “umm” 16 times in a minute. People that incessantly do this suffer from some sort of disability where their mind can’t concentrate on talking and think at the same time. They talk but loose coherency when their minds can’t get the information they are looking for, or their arguments lack voracity and they are playing for time to try to get a coherent argument together. In general it means that there’s not too much up there. This kind of person gets to the elevated positions they hold by their social skills, making themselves liked or holding power that others like to connect to. They don’t get there with the assets between their ears.
It was supposed to be questions from hangers out, but it was clear when Malcolm was answering a question from a lady in his answer Malcolm said “In your book you also referred to this” clearly the question was “Dorothy Dixer” as Malcolm knew this “hanger out”. The question was of course totally irrelevant (this lady also “Yannoed” a lot) and Malcolm consumed a large amount of time fudging a long winded reply.
He also broached the conspiracy theory that the tech media was out to get him and they were largely an “uninformed lot” because they oppose his broadband policy. Pursued the argument that he was lonely voice in the wilderness, the only rational suppository of broadband engineering above all of the socialist tech heads that want to download “Game of Thrones” and game all day at public expense. Again stated the largely “liberal view of the internet and broadband infrastructure” was merely for downloading movies and other entertainment.
When the subject of NZ’s FTTN came up he simply skated around with argument that “NZ was very smart because they are real poor”, but never explained why this very poor country’s conservative government would want to waste so much money building fibre to the home, and said “Well this train has left the station” whatever that means in this context. Then repeated the old “Irish travel guide” gag, which had nothing to do with whatever he was talking about.
Malcolm has no perception of the future he see’s everything through the fog of the past. His vision of the future is a mere linear extension of today. Can’t see why anybody would want a fool like him as prime minister in lieu of the other fools running for the job.
I found Malcolm in this interview to be totally incoherent, what he needs to do is explain how he is going to keep fibre to the home on track and overcome the management, training and labour shortages causing the NBN to run behind schedules. I can’t see how his plans could possibly be coherent when he knows the end game is fibre to the home, so what is the point of building 50-60 thousand mini telephone exchanges that when the program is complete in 10 years they will have to be taken away and dumped.
He also broached the conspiracy theory that the tech media was out to get him and they were largely an “uninformed lot” because they oppose his broadband policy.
I expect being held to account by the tech media would be upsetting for him, they aren’t used to it from the other media…
MT has been lying about the ownership of the copper all along. Here’s the conversation from 6-May oursay debate with Conroy still on MT’s own blog – http://www.malcolmturnbull.com.au/media/transcript-oursay-debate-6-may-2013
“STEPHEN CONROY:
Look there’s a number of points there. Look Malcolm is just behaving like an incumbent telco. They just want to sweat the copper as much as they can and try and grab as much profitability out of that copper as much as they can. There isn’t a government enterprise anywhere in the world or a non-incumbent that is rolling out, as Malcolm is planning on doing, buying Telstra copper. It’s got to the dumbest piece of public policy I have seen in my 17 years in parliament. Buying an asset you know is literally degrading in the ground.
MALCOLM TURNBULL:
You’ve paid for it. You’ve paid for it.
STEPHEN CONROY:
We haven’t paid for the copper. We’ve paid for access to the ducts Malcolm”
Later (05/08/2013) MT mendaciously stated on ABC radio in Cooma (Mornings Tim Holt – http://blogs.abc.net.au/nsw/2013/08/malcolm-turnbull-and-the-nbn.html ) that Telstra “for all intents & purposes sold it [copper network] to NBN”.
Abbott gave Turnbull the task of destroying the NBN and as a lawyer he has done his best.
The statements of Turnbull’s vulgar staffer, Stephen Ellis writing that “the NBN stands to be greatly modified [post-election]” is of concern and the MSM has yet to interrogate Turnbull for an explanation to reveal exactly what his staffer meant about NBN modifications post election.
I think it was the Very Practical Dutch that realised that in running FTTN/C/B, they are in fact running fibre directly past the majority of premises (to those nodes every 800meters), so still having to do much of the remediation, then handling issues with existing copper to the premises when the job will have to be done anyway some tome, so why not now when the teams are in the area with all the necessary equipment and permits etc
I am, like all the other readers, waiting for the other shoe to drop. For Telstra to simply hand over the copper without monetary compensation would require the Coalition to sweeten the deal in some fashion. Handing NBNCo over to Telstra is a bit much – my guess is that Telstra will be allowed to overbuild with its own infrastructure. $11 billion is a decent chunk of capital which Telstra can use to cherry pick most (if not all) of the highly profitable areas in the country and deploy their own fibre.
” my guess is that Telstra will be allowed to overbuild with its own infrastructure”.
It seems obvious to me that this is the end game. Telstra already has form in this kind of game.
Turnbull wil setup the FTTN as the provider of last resort, open to all RSPs.
Telstra then comes into the most profitable areas and overbuilds the FTTN with actual fibre to the premises, with no regulation.
So we end up with most urban areas having a choice between two networks, one an open 25Mbit FTTN, one a closed 1000Mbps FTTH. Guess which one the most profitable customers choose?
The least profitable, mostly rural, areas remain on 25Mbit.
Telstra gets to retain it’s vertically integrated monopoly while slowly strangling the now crippled NBN.
If I was Telstra I would pay Turnbull to take the copper in order to get that result.
I thought it was already Coalition policy to allow infrastructure competition?
From the Liberal policy document:
“The Coalition will remove or waive impediments to infrastructure competition introduced to
provide a monopoly to Labor’s NBN.”
So Telstra will indeed be free to overbuild under an Abbott government. With such a horrible business case, I can’t see NBNCo surviving at all under the Coalition.
Ironically… as I mentioned earlier that was the *exact* reason why the original FTTN tenders did not go through – Telstra had planned to overbuild its own FTTN network and hence didn’t really bother w/ the original bids.
Their ultimatum was basically the NBN should be built (and owned) by Telstra or we will just overbuild w/ our own existing copper system. This is what pushed the change to FTTP
Speculation, speculation.
A few more weeks and the truth will come out. Will the Coalition win the election? Probably but not certainly.
Will Malcolm’s plan work or fall apart? Has he got a gentleman’s agreement with Telstra? Is the copper network as bad as some say. Will MT give up on his plan and keep going with FTTP, and then, blame Labor for the delays but take the credit for completing it?
At least, after the election, should the Coalition win, the truth will be before us. No more conjecture from or according to Fibroid,who might have retired, be gloating or hiding, depending on how things pan out.
“The Duke of Double Bay is a smart cookie.’
Not always. Utegate comes to mind.
What a joke. As an ex Field Supervisor working (for contractors to NBNco,NOT NBNco) on NBN projects, The whole FTTN is ridiculous.Telstra allowed access to the conduit for a nice $11B, NOT the copper. Yes money MAY be saved going to the node but the state of the copper is an absolute joke. The money saved will be quickly lost over and over again, as repairs and maintenance on the last mile copper will keep techs busy for years to come. Meanwhile the actual real world speed on the net will be well below promised and require more energy to run it. Yes I am biased toward FTTP, but the truth needs to be told. The NBN roll-out is something that has to be done. Think of our telephone lines like a road, Right now these roads are like outback dirt tracks, we keep filling up the potholes and paving over them. We have to replace them with technology that will keep the traffic rolling along, like a freeway straight into our homes.. The FTTN is nothing less than 100 lane road merging into an old dusty track.All that speed just bottlenecks at the merge and we will pay for it for generations to come…and while mi on a rant…The ONLY reason NBN has slowed is simple..NBNco pay Major Contractors as per an agreed rate per task. These rates are industry standard,pretty much copied Telstra rates.For example Horizontal Drilling is paid around $120 per metre(it seems a lot, but one of those machines costs around $250,000 and has to be skilfully operated by several staff,it is ,the industry standard. The big Contractors take the $130 per metre and then subcontract the work out to very dedicated, skilled and highly qualified subbies,they get around $30-$40 per metre..They are losing money So you do the math. I have watched as my friends small business, mostly, “Mum and Dad” business, lose more money in the last 2 years than they have made in the last 10 years…..The bottom line is if we build it, they will come, and “they” are major companies form the all over the world who refuse to set up Headquarters in Australia because of out internet. Its not about downloading your porn faster, or illegal movies, Its about catching up to the rest of the world and setting ourselves up to be a real leader in this technology..
Even if they do give them the copper, which i doubt… LNP are still going to build and inferior network using copper for the last mile. Tell me in 5-10 years time when fibre needs to be laid to everyones doors how much will it cost then to do it? You guest it, probably double the price to do it properly. We have monkeys running this country, and an even greater monkey is just about to take the helm. enough said.
Renai, in reference to this comment: “Turnbull’s claim that a Coalition Government wouldn’t need to pay Telstra anything at all to buy or gain access to its copper network is, on the face of it, completely ludicrous. Frankly, even the physical copper in the network is worth something,”
I give you this, as I posted on OCAU’s NBN megathread a few months ago:
Scrap copper is currently attracting a price of $9 per kilo. Each house has 4 strands of copper going to it, which is 12 gauge per strand. 12gauge wire is 4kg per 100 metres.
So, using the figures already quoted in this thread, at 800m of cable per residence, with 60% of roughly 10 million homes still using the copper, telstra will be asking at least $768 million to leave it in the ground. That’s how much they would have got for it on the scrap market.
Obviously this is assuming 800m for EVERY residence, so that figure could be reduced somewhat….. Even at $450 million, that’s a lot of scrap copper that Turnbull wants telstra to give him for free. And telstra shareholders should demand the resignation of any board member that supports it.
Bare copper may be worth $9 per kilo.
How much per kilo to get it out of the ground?(or off the poles)
How much per kilo to remove the insulation? (you can’t burn it off anymore)
How much per kilo to get it to the dealers yard?
100 or 200 or 600 pair cables may be worth recovering.
1 or 2 pair — Forget it.
Actually, no, that’s not the bare copper price. That’s the price for scrap copper cable, with insulation.
The figures I quoted were estimates for households only, assuming a single 2-pair line to each one. Obviously many houses have more, and that doesn’t include all the businesses out there, many of which have old commander systems that require MULTIPLE copper lines.
Taking the copper out of the ground is VERY easy. They only need to pull on it. It doesn’t take any special tools, machines, or skills (although machines exist that would make the job very efficient). So no technicians are needed. All this means that taking the copper out of the ground is CHEAP. There are still lots of people on the dole out there……
Another way of looking at the economics of recovering copper is:
2 blokes and a truck, not much change out of $200/hr.
That’s 20Kg+ per hour of BARE copper.
Actually the price I quoted is for scrap copper cable, not bare copper. That’s how much Sims metal pay for it.
and for a worst case, it would take your 2 guys and a truck 10 minutes to pull 100m of cable out of the ducts, and that’s 16kg. It quickly becomes VERY profitable, doesn’t it?
“2 blokes and a truck, not much change out of $200/hr.”
$200/hr? I can get that for $80/hr here – and that’s public pricing on 1 hour.
How could it not be illegal for telstra to hand over an asset gratis? I am a telstra share holder, be fucked if turnbull gets it for freel
Gentleman agreement = you give us the copper and while we’re at it, you might as will bolt on the fibre for us because you know the ins and outs of the copper side of things anyway. Here have some over priced contracts, but the copper is “free” for us, okay?
“..[suspect Turnbull] has met with Telstra clandestinely on the issue, and believes he has something of a ‘gentleman’s agreement’ with senior executives, perhaps even Thodey himself, on the issue of the telco’s copper network under a Coalition Government. ”
Absolute rubbish.
Ever heard of ASX Listing Rule 3.1 Continuous Disclosure? It requires a listed entity to disclose “market sensitive” information to ASX immediately.
Do you honestly believe that Malcolm Turnbull or David Thodey would subject themselves to a breach of these ASX laws?
It’s not quite that simple ;)
I think Renai is right here. Those rules have a few “out’s” :
Listing rule 3.1 does not apply to particular information while each of the following requirements is satisfied in relation to the information:
3.1A.1 One or more of the following 5 situations applies:
– It would be a breach of a law to disclose the information;
– The information concerns an incomplete proposal or negotiation;
– The information comprises matters of supposition or is insufficiently definite to warrant disclosure;
– The information is generated for the internal management purposes of the entity; or
– The information is a trade secret; and ….
So I think it is safe to assume that this type of thing would fall under “The information concerns an incomplete proposal or negotiation”
“what I personally suspect is that Turnbull is able to make this comment because he has met with Telstra clandestinely on the issue, and believes he has something of a ‘gentleman’s agreement’ with senior executives”
Reminds me of the “Financial Heads of Agreement” with Telstra that Labor had…after more than a year of trying to get it ratified, it had to be completely rewritten. And that’s not to mention the long delay and required changes from the ACCC. That said, I think that for Turnbull the only really important point is being in power while all those decisions are being made. Damn the consequences, full speed ahead! :)
From past LNP shell games, I think Telstra will lease the copper to Turnbull, meaning at least an increase of $15 of every NBN connection. Which is what a person can save moving from a PSTN service with LSS and Internet to a NBN plan with VoIP service. Turnbull will force the POI fees down to appear to be affordable, then allow Telstra to bypass a public tender for maintenance of the copper and we will be back to square one and paying even more for phone and Internet whilst blaming labour that their housing insulation scheme on steroids was a huge waste of money. Yet we will be left with a failing copper network and a cable network falling to pieces, Telstras cable network is not in very good shape, the level of redundancy is not there and the joins from the street to the ntu fail regulary.
MT will get the copper for free in a way but Tel$ra will own the last mile and we will be paying for line rental forever even if you didn’t want a home phone. The Tax payer will upgrade the Tel$ra network Tel$ra charges on the last mile. Bloody Fiberal party at its best. where screwed if these brain dead morons get in which looks likely not just the NBN but everything.
Dont forget Line rental will most likely still apply & Telstra will still own the copper between the home & node cabinets!!
I wonder if a separate “line rental” charge could also explain why Malcolm thinks his plans will be cheaper?
Telstra Velocity plans at FTTP greenfield site (Emerald Lakes, Gold Coast) requires customer to pay line rental for obsolete landline phone evidently because their antiquated billing system requires a landline phone number. Hopefully NBN will change this soon!
The original deal between TLS and NBNco was to enable FTTP. If Turnbull thinks he can ask and get more from TLS (copper last mile) with no additional payment or cost then he must think he can relinquish some other aspect of the deal that he believes relates to FTTP only.
Or perhaps TUrnbull is being a politician and dancing with the truth, does he mean no up front payment? Could he be planning to pay TLS to maintain the copper lines he acquires from them? A sort of line rental where NBNco contract TLS for their expertise?
But all of this overlooks the single most important aspect…
Will Turnbull’s renegotiation of the TLS definitive FTTP agreement to deploy FTTN in the short term still enable the deployment of FTTP on a timetable of NBNco’s choosing? Or will his renegotiated deal force the need for a third visit to the negotiating table when the inevitable happens and we deploy FTTP?
“I personally will crucify Turnbull in the pages of Delimiter for his mistake.”
Sadly, that will come far too late for Australia.
The FTTP dream will be dead and no future government will ever again consider an infrastructure project that cannot be started and finished within a single term of government.
Coalition policy since the Howard years and they regard journos and the public with the same contempt.
‘… you must remember that the Australian voter has a short memory span… in fact, less than 14 days in most cases!’
– John Howard
The time for critical examination of “ludicrous” policies is BEFORE the proponents are in a position to implement them, not afterward when the impossible fails to materialize.
“The time for critical examination of “ludicrous” policies is BEFORE the proponents are in a position to implement them, not afterward when the impossible fails to materialize.”
Why not do both, as I plan on doing?
“Why not do both, as I plan on doing?”
*holds up Renai while crowd cheers* (Old El Paso commercial)
/starts Mexican Wave.
And that Line rental, against trend, will most certainly ratchet upward. For a glimpse of a future enabled by Telstra, just take a look what they did in South Brisbane, forcing voice rental with internet
There is dangerous “lock in” risk if Telstra gets greater control of the network post the election!
Hope the senate can block any legislative favouritism toward the incumbent monopolist telco
And that’s Telstra FTTP! Imagine what they’d do with FTTN ;)
As an aside, there was nothing stopping Telstra from doing FTTN in South Brisbane … but they did not.
“As an aside, there was nothing stopping Telstra from doing FTTN in South Brisbane … but they did not.”
There WAS something stopping them, sanity.
There were basically 3 options
1/ New exchange site with re-routed existing copper
2/ FTTN (Top Hat is FTTN using ADSL2 like most existing FTTN roll-outs)
3/ FTTP
At the time the decision for South Brisbane was made, the NBN proposal was for FTTN yet Telstra rejected this in favour of FTTP.
The only people truly in a position to evaluate the real cost of FTTN vs FTTP going forward chose FTTP.
Think about that when you are considering the relative merits.
From 2004: “Telstra is not interested in pursuing VDSL. We are not trialling VDSL. We see fibre to the premises as the most likely technology to support very high speed access services of the future,” said a spokesperson for the carrier.
http://www.zdnet.com/telstra-vdsl-no-thanks-1139167116/
Telstra chose FTTP because it didn’t fall under the existing wholesale rules they were forced to use for copper. So they could screw people moreso than if they put copper back in.
Liberals NBN = gravel freeway
I get sick of the comparison of the NBN to roads, it is of no relevance at all.
On a road, your top speed is determined by the speed limit of the road.
A packet of data on the internet’s speed is determined solely by the slowest link in the chain.
It would not matter a jot if transfer across the back-haul was truly instantaneous, the fastest speed you will ever experience will be the uncongested speed of the slowest link in the chain.
On FTTN, in the upload direction, that’s about 4Mbps.
I would like you to do 110 or more on gravel road for extended period
Network managers spend their life eliminating bottlenecks. There’s always one out there, the so-called weakest link. Installing fibre all the way pretty much eliminates one segment from the troubleshooting.
I think the car analogies started when NBN naysayers first likened the FttP to giving a Ferrari to each person in Australia.
*shrugs*
Under a Liberal government would telcos still be required to provide wholesale access to any new fibre networks?
Could Telstras strategy be to “gift” the copper to NBNCo (along with all maintenance responsibility) and then turn around and use the switchover payments to fund a competing all-fibre network which they would be under no obligation to provide wholesale access to?
How would that change the future broadband landscape in Australia?
To partly (maybe) answer my own question: from skimming the coalitions plan again:
“The owners/operators of new high speed broadband access networks will, however, be required to make them available to access seekers on non-discriminatory terms at wholesale prices for reference products equivalent to NBN Co’s wholesale price caps”
Thats curious, the Greenfield section one is worded a little differently:
“Private builders/operators of fibre networks in new estates will be offered a financial incentive that reflects any net cost savings that their investment generates for NBN Co, provided such networks meet NBN specified standards and their owners make them available to access seekers on non-discriminatory terms at wholesale prices for reference products no higher than NBN Co’s wholesale price caps (or similar price commitments agreed by NBN Co and the ACCC).”
I’d have expected them to be more the same (as in requiring the transfer, not making it optional).
What reason would there be to make Greenfield ones not be required to be transferred?
Today’s copper price is US$7.30 per kilo, clean. While this might sound like a gold mine, it is quite expensive to mine it out – especially when there are working glass fibre services in the ducts. (I’d rather have the exchange buildings that become superfluous to requirements.)
These elements have been costed many times, and Telstra did extract extremely generous terms from a clearly desperate Conroy.
If delimiter intends to ‘crucify’ Turnbull, is the stake self-immolation if Turnbull is correct?
Children believe in the tooth fairy. It’s a sort of wonderful innocence. Turnbull isn’t a child.
A grown man, responsible for the single biggest telecommunications build in recent nation history believing Telstra will simply hand over a copper network that is currently generating active income as-is – is living a fantasy.
Telstra won’t hand over a profitable network without strings. Not even a child would be silly enough to imagine it.
I’m sure Turnbull and Theoday have had informal talks. Hard to imagine this hasn’t happened. But it cannot and will not be as simple as Turnbull wishes to make it seem.
Telstra’s board and executive are charged with making money – “gifting” a network to a government doesn’t strike me as any such.
In other words, Turnbull’s costings assume Telstra will simply hand over the network. He has all but admitted it. Bravo.
Telstra is in the bargaining position of the century, should it wish to seek further compensation for the CAN itself.
Communication 101
Turnbull needs copper network for his plan.
Thodey has the copper network but cannot make a decision without board approval.
Thodey does not want to endanger the prospect of making more money for shareholders.
Thodey makes all the right noise to reassure Turnbull that everything will be fine (Nice copper, cheap)
Negotiation begins. Thodey has the upper hand, Turnbull needs the network.
How long will it take to achieve an agreement?
Who do you think will get the best deal?
If Malcolm can pull off a gentleman’s agreement with Telstra, where Telstra don’t get anything extra at all, he’ll go down as the first in history to do so.
Telstra and Tony have something in common, if it’s not in a contract, it don’t mean shit. I’d have though Malcolm would have learned that by now.
“If Malcolm can pull off a gentleman’s agreement with Telstra, where Telstra don’t get anything extra at all, he’ll go down as the first in history to do so.”
If Malcolm gets the Telstra copper for nothing, I, as a shareholder, will be launching legal proceedings against the board and executive for failing to protect my interests as required by corporate law.
The $1500 payment is low, and recognises that Telstra will make serious money by retailing high end services to many fibre customers, including cloud services, data storage, and Foxtel over IP.
The 99.25% shareholder vote to accept these terms was predicated on retail revenues for services that cannot possibly yield the same return per user on slower copper.
I suggest that Telstra will be looking for $3000 per copper line, and will want it for 100% of lines, regardless of the lower takeup of services.
Now FTTN costs more than FTTP, not less, in the Australian context, because the copper is owned by Telstra.
Who will hold the Liberals accountable after the election ?
Who will hold them responsible for sabotaging the NBN ?
In years to come, when AU sinks further and further behind in the tech tree who will be accountable ?
What cost will they have to pay gross public mismanagement of tax payers funds ?
Surely justice will be served…
Here is a question I would like to ask Mr turnbull. What happens to the copper network in HFC areas? Will we be able to have adsl2+ still since we aren’t getting FTTN. What actually happens to it? Does he still want it? Wouldn’t that mean everything remains the same except for the pretty likelihood of HFC becoming the new adsl in terms of congestion?
Also why can’t we load share the optus and telstra HFC networks in areas that have both eg mine. To decommission one and force everyone onto to telstra will do what exactly? I really hope telstra says no and charges them a super high amount to the point it would cost more then building FTTH.
Then the liberals can build the NBN the way it should be and also have a excuse that it was all telstra’s fault. Because politicians they do like to blame everyone else.
I gather from just re-reading his plan that HFC areas will not be prioritised and won’t see any FTTN investment until 2017-2019 (i.e. second term).
The coalition plan says it wants to stop the decommissioning but that it would be critical that the networks become open-access for wholesale use (unlikely to happen IMO).
Last I saw was him say that there would be no FTTN for people in HFC area’s because HFC was “pretty darn good.” that more likely we would have HFC and no FTTN at all ever because 2 networks would be pointless.
So I am wondering will they still say we get to keep adsl2+ if we wish. I was going though the problems with having a multiproviders on HFC on something I was going to write on whirlpool but I wanted to see if the thread would get closed due to being off topic first.
How exactly are they going to keep dodo data different from lets say telstra’s also what would be the point in Telstra having a offering if they say 25Mbit minimum? You would just go with the cheapest. I can’t see why Telstra would they approve of being kicked of there own cable.
There would be load sharing on the eurodocsis network to what end though separate signal sets for different providers? But how many frequencies would lets say telstra get over dodo? This just turns brains into mush after this.
I’m pretty sure he’s just said HFC will be prioritised to last part of the roll out, not that they won’t get it at all.
Turnbull has several options, including service declaration. The declared price for the upper spectrum of copper is under $3 per month for the exchange to customer leg, including duct passage. FTTN of course uses shorter copper lengths. The ACCC has demonstrated over many years that it has no hesitation in imposing ridiculously low declared access prices on Telstra, so Telstra shareholders should not become too beligerent.
Renai
I would have to think under continuous disclosure laws that Telstra would need to reveal any discussions that had progressed as far as a Gentlemans agreement.
If you’r right, I’d say some institutional investors, along with larger SMSFs will be looking at a class action suit since the market was not kept fully informed. I think it would be easy to argue that a recent investment, or continuing to hold the investment due to believing the Coalition would win and have to offer a higher value to the copper network would have enough merit to get a hearing in court.
I’d also think Thoedy would really have to explain why the copper isn’t worth any more than the current contract. Possibly Turnbull has agree to take over all Asbestos liabilities for the Telstra ducts. In that case the extra cost will be hidden from view
If Turnbull is convinced he can get the Telstra CAN for no additional payment, I’d like to tell Turnbull this:
“so if you believe that I guess you believe Santa brought you your presents on a sleigh with reindeers, right?”
“…believes he has something of a ‘gentleman’s agreement’ with senior executives…”
What’s the bettingMalcolm will do what he has done all the way through this debate? Try to bully Telstra into giving it to him gratis? But Telstra isn’t the small kid on the block and is probably Turnbull’s equal when it comes to getting heavy.
“…believes he has something of a ‘gentleman’s agreement’ with senior executives…”
I’m actually starting the think he’s bluffing, like the LNP seems to be doing with a lot of their policies. If the look at any debate they have, there are a lot of points they avoid answering by “going off” about Labor waste or something similar…
“However, what I personally suspect is that Turnbull is able to make this comment because he has met with Telstra clandestinely on the issue, and believes he has something of a ‘gentleman’s agreement’ with senior executives…”
I’m sorry, but if this is the case, what was the point of Andrew Penn’s comments a couple of weeks ago?
““From our point of view we’re sort of agnostic as to which particular method it is, we just want to make sure that we basically support the government, support the rollout, provide the great service for our customers, but also importantly protect the value for our shareholders. So we can respond to either.” [emphasis added – source: delimiter.
I’m sorry; but the words I emphasized above were (from memory) in 2 seperate quotes; in that article. Given their nature; it tells me that Telstra are expecting value for their copper. They aren’t giving it away for nothing. Given that there is no “value” that can been seen as being given to Telstra in the Coalitions NBN plan, then they haven’t accounted for the value of the copper.
Whatever form the “value” comes in; it is going to cost Australia something.
Yeah, right!
What will Telstra do when they have to tell everyone Cellphones cause Cancer, will they compensate them with their 2 Billion profit, ??
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