Telstra “unable” to sell South Brisbane FTTP to NBN Co


news Negotiations appear to have broken down over the planned sale of Telstra’s Fibre to the Premises network in South Brisbane to the NBN company, with the Government stating that Telstra has been “unable” to reach an agreement for the infrastructure to become part of the National Broadband Network.

Telstra replaced the existing copper network in the South Brisbane Exchange area over several years leading up to January 2013. The telco chose to install Fibre to the Premises to replace the copper to the 18,000-odd affected premises because its telephone exchange in the region was closed in order to make way for the new Queensland Children’s Hospital in the area.

The area is highly contentious because although Telstra does offer open access to other telcos to use its fibre, it does so on terms which Telstra’s competitors have labelled as being highly uncompetitive. Issues include the company’s wholesale prices — which are claimed to be markedly higher than equivalent broadband prices on the previous copper network — to the lack of equivalent services such as the ability to stream IPTV services via multi-cast.

Telstra and the NBN company have for several years been negotiating over a sale of the infrastructure to the NBN company, with Communications Minister Mitch Fifield saying in February this year that the pair planned to recommence negotiations regarding the infrastructure.

However, last week it was revealed that the NBN company had started deploying new fibre infrastructure in at least some areas in South Brisbane, overbuilding streets which already have access to Telstra’s fibre.

Over the weekend, Delimiter sighted correspondence between the Federal Department of Communications and a resident of the area.

The resident had written to then-Communications Minister Malcolm Turnbull in May this year, complaining about the high prices and lack of market competition in the South Brisbane area, due to the unfavourable terms on which Telstra operates its FTTP network.

In response, in June Department of Communications Assistant Secretary (Market Structure Branch) Philip Mason wrote back to the resident advising them that negotiations between Telstra and the NBN company had broken down.

“Despite entering into good faith negotiations, Telstra has been unable to negotiate the sale of the network to NBN Co,” Mason wrote.

Mason added that the reason that Telstra was able to get away with its approach in South Brisbane is that the company has achieved an exemption from being able to supply normal wholesale services as required under the Telecommunications Act.

Instead, the company is supplying a specific type of wholeasle service named a ‘Fibre Access Broadband Service’, which the telco is providing to retail ISPs at a higher cost than usual for a broadband service and with restrictions not found on other services.

“The Network Exemption was granted on the basis that the South Brisbane network largely predated the Part 7 and 8 legislation and complying with the new laws would have resulted in Telstra incurring significant unforeseen costs,” Mason wrote.

The exemption which allows Telstra to continue operating on this basis in South Brisbane was slated to end on 31 December 2013, at which point Telstra was expected to have sold its network to the NBN company. However, as Mason noted, this has not happened.

It appears that the NBN company’s apparent inability to buy Telstra’s South Brisbane network is leading to a number of outcomes in the area.

Firstly, the NBN company has started overbuilding portions of Telstra’s network. Some of the company’s fibre installation work in South Brisbane relates to greenfields estates and high-rise apartment blocks that do not currently have access to Telstra’s FTTP infrastructure.

However, other segments of the NBN company’s work in South Brisbane appear to be directly targeting areas already served by Telstra’s FTTP. For example, over the weekend ISP SkyMesh confirmed that the address of one South Brisbane resident who already had Telstra FTTP was listed in the NBN company’s database as being planned for future fibre.

In addition, the lack of any sale to the NBN company means that Telstra’s high prices and restrictive conditions in South Brisbane are stifling retail broadband competition.

The South Brisbane resident who wrote to the Communications Minister in May noted that a particularly frustrating aspect of Telstra’s services was that the company forced FTTP customers to also purchase traditional telephone line rental — which many may not use.

“It is beyond a joke that unless you enable the RJ11 voice port on your network termination unit (a fee of $20-$30 per month), you are not able to provision any services on the data ports,” they wrote.

It is not clear when the situation will be cleared up. Delimiter is seeking further comment from Telstra and the NBN company.


  1. Given the absence or near absence of an internet service in other areas, why is South Brisbane being prioritised? This must go down well in the bush in particular.

  2. This is what many wanted wasn’t it? Private enterprise to build fibre? Now they to overbuild it at taxpayer’s expense?

  3. “Infrastructure competition”.

    I am sure the ACCC are falling over themselves, squeaking with joy as they take the press releases and rub liber–okay fine, you get the point.

    I imagine NBNco aren’t prepared to pay (whatever the asking price is) for the network; it’s clearly not part of the existing agreement. If Telstra have a strong ability to prosecute services over it, and aren’t buried under the same comms legislation as the CAN, then I don’t blame them for not selling.

    Why would they? What – the ACCC might force them? Hah. The fact that they are just building around Telstra, suggests the gulf between seller and buyer, isn’t worth the time to fight.

    Again, queue the effervescent Richard to explain how this is bad, and yet absolutely Conroy’s fault and totally not possible for it to be, oh, I don’t know, a direct consequence of the change to MTM, whilst ignoring that, apparently, there has been a Liberal government in charge for almost an entire term so far.

    • I understand them not wanting to sell at the right price as the FTTP will be in demand in the future once FTTN has/if/maybe finished.
      But why would nbn overbuild there? Why not just leave it for a few years and start building somewhere that needs decent internet first?
      Just doesn’t make any sense.

    • @bb Negotiations for this fibre started back in 2011, surprising you’d make a connection with MTM (coalition still years from govt, Quigley still spouting his on time and on budget mantra).

      However the problem remains, NBNCo under new management doesn’t appear to have the answers.

      • Yes it did; back then NBNco wasn’t just looking to buy everything, however, nor did it have to. It had the potential to negotiate leased access.

        By the way, thanks for reminding me that you’ll flog the “on time, on budget” Quigley horse every chance you get, yet ignore Turnbull’s bold claims (such as 2016; which is a little over two months away, by the way).

  4. Clearly Telstra are making far too much money from their FTTP networks to sell them to NBN* … Richard will come along shortly to correct me and state that Telstra are currently loosing loads of money from this very expensive infrastructure and if Telstra actually knew how to run their business they’d have deployed FTTN to replace their Exchange which they sold!


    *isn’t it funny how Verizon also seem to be making money from their FTTP networks and are losing money from their legacy copper networks! Hmmmm.

    • Or that Verizon claim there switch from FTTN to FTTP was partly due to maintenance cost.

    • @do ironicly you did a good job correcting yourself.

      The FTTP upgrade of South Brisbane was die to the construction of the new childrens hospital, including over what was the old Telstra exchange which they sold to the State govt.

      The exchange sale offset the cost of the overbuild with fibre. As highlighted in the article Telstra wholesale prices are much higher (plus mandated fix line service), customer density excellent. The very customers NBNCo needs to offset their higher average CPP.

      • Why did Telstra deploy fibre, when FTTN is the better, faster solution, Richard?

        In your own time.

        By the way, the prices are much higher because they are exclusive to the existing legislation; there is no regulation to force the only supplier to compete, so they don’t have to.

        Which is why Telstra elected fibre. FTTN would leverage the existing CAN and thus almost certainly fall under existing legislation. I’m helping you answer the question, by the way, because I know you’ll have difficulty in forming the words. It’s hard, I know. But do try. It’s quite liberating. :)

        Density on that network is only valuable if the network is actually leased/ acquired. Since it hasn’t been, it isn’t.

        • Didn’t they deploy fttp BECAUSE it wasn’t copper and so wasn’t legislated like it. They could do what they wanted with it. Which was rip people off by forcing them to take up a pstn that they didn’t want as an example

      • @Richard your comprehension skills need work if you think my comments in any way ‘corrected myself’!

  5. If I was Telstra I’d be reluctant to give up the opportunity to manage at least one FTTP based Exchange, to retain the expertise and have the opportunity for testing new techniques and solutions related to FTTP.

    At some future point, Telstra might want to build, tender for or negotiate to manage and operate a FTTP Network somewhere in Australasia. Either their own, or someone else’s.

    The continued Telstra ownership and Telstra operation and development of the South Brisbane Exchange and related FTTP Network Services might be something that Telstra will now not give up no matter what you offer them.

    Has no-one else even considered this possibility. Renai?

  6. So yeah this sort of non-competitive behaviour is why we needed the NBN in the first place.

    Telstra don’t want to give up the FTTP in the area because they know Fibre is the best solution, and at the moment they don’t need to share it. If they thought any other tech was worthwhile, they would take what the NBN offer.

  7. NBN are overbuilding with FttP though right they aren’t doing something dumb like going FttN?

    South Bris is probably a reasonable example to the Cu Fans that even our incumbent Telco decided on Fibre instead of using the Cu it owned at the time!

  8. What. A. Fucking. Joke.

    The renegotiated agreement between Telstra and NBNco limits Telstra FTTP remediation to 22% of the total network build AIUI. NBNco are going to piss away a portion of that on an area already serviced by FTTP?

    • I’m sure it can be added the copper order. I mean, it’s only money.

      It’s not like the cost of the NBN, prior to Coalition gaining government, was ever mentioned, right?

    • If NBN installs FTTP here in South Brisbane, I doubt Telstra would be able to sell it’s South Brisbane Fibre to anyone.

  9. If NBNco owns the main network between points and then they own cables going to each house in the area can’t they just not allow Telstra to reconnect to the main network?
    If they sell wholesale access to Telstra they can set the price wherever they like or leave Telstra to have an island of fibre in the area or does NBNco still lease main network access from Telstra?

    • With Telstra HFC they’ll throw in the phone line for free and make the internet connection cheaper by about $30 per month if you bundle the two.

      Does this apply to velocity areas too?

  10. I got a souvenir mug for getting all of our customers off the copper and onto the fibre, quickly and smoothly, before they pulled down that exchange.

    I must see if it is worth anything on eBay. Maybe I could charge an exorbitant amount for it?

  11. The bundling issue is my biggest annoyance with Telstra. At the time I signed my contract, the Ultimate Cable plan came with a phone line and a mobile SIM card with a monthly 500 MB cap. The $20 speed boost was the only way to get 2 Mbps upload, so I’m paying $125 per month. But I haven’t used the phone line or SIM card a single time in a year and a half. Getting the bundle does give a discount, but it feels wasteful. Surely these digital services should be easy to provide on demand.

    • The other annoying thing is that you can’t get ADSL from one company and HFC from another.

    • Telstra doesn’t roll with good for consumer products… that doesn’t help the shareholders.

      I’ve you have a monopoly abuse it they say!

  12. Telstra and good faith negotiations don’t really go together do they.

    I can’t imagine that nbn offered the 88 million dollars they claim fibre will cost to lay. I imagine they would have offered close to what it really costs to lay fibre. Some one has that figure. Will we ever find out that figure. Not under this government.

  13. why would nbn buy Telstra FTTP network when it has already agreed to buy their HFC network?doesn’t that mean telstra customers will be forced from FTTP to nbn hfc network once NBN has HFC network ownership?

  14. Simple solution, over build them, there you go problem gone, this is where a Steven Conroy comes in handy.

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