Whinge: Telstra wants to stop NBN Co helping smaller ISPs at all


news The nation’s biggest telco Telstra has told the Federal Government that the NBN company must not be allowed to assist smaller ISPs to better compete for customers on the National Broadband Network, despite the fact that Telstra itself already has a 50 percent NBN market share.

In December last year, the Government introduced the Telecommunications Legislation Amendment (Access Regime and NBN Companies) Bill 2015, which makes a number of modifications to the law governing how the National Broadband Network project as a whole interacts with private sector telecommunications companies and infrastructure.

The bill is currently — as is normal practice for any bills considered even mildly controversial — the subject of a Senate inquiry, held by the Senate’s Environment and Communications Standing Committee.

In a submission to the inquiry, the nation’s biggest telco Telstra noted that it had few problems with the bill.

However, Telstra did strenuously object to one component of the bill, which would allow the Communications Minister of the day to change the line of business restrictions on the NBN company through regulation.

The bill would still force the NBN company to provide telecommunications services only on a wholesale basis, ensuring the NBN company was not able to compete directly with retail-focused broadband companies.

However, in its submission, Telstra noted that it was still concerned about what it described as “mission creep” at the NBN company.

The NBN company itself has recently stated that it was considering developing a service which would, to some extent, work around a controversial decision by the ACCC several years ago which would meant that ISPs seeking to sell NBN services nationally would need to connect their own networks to no less than 121 Points of Interconnect on the NBN network.

The 121 PoI decision was extremely controversial in Australia’s telecommunications industry because it sharply advantaged major telcos such as Telstra and Optus who already had large swathes of existing broadband infrastructure. At the time, Internode managing director Simon Hackett stated that the decision would force many smaller ISPs out of the market; an opinion which appears to have since been validated.

The NBN company has also indicated it is interested in assisting new retail broadband players to connect to its network.

However, Telstra — which revealed last week that it already had more than 50 percent market share of NBN customers — wrote in its submission that this behaviour by the NBN company could see it “encroach into areas of competitive activity”.

The proposed new NBN PoI product, Telstra said, would see the NBN company “compete directly with private investment in a competitive part of the market”, while any attempt to help smaller ISPs “could risk its Retail Service Provider neutrality obligations”.

Federal Parliament — including the Senate, which is not dominated by any one party — can still disallow any regulation the Communications Minister of the day makes in changing the NBN company’s remit, with the disallowance motion procedure allowing parliamentary debate. But Telstra claimed this oversight wasn’t strong enough.

“The option for Parliament to disallow a regulation is an inadequate substitute for a legislative amendment to change NBN Co’s remit,” wrote Telstra. “Any such departure from a fundamental aspect of the NBN policy should be fully debated through Parliament.”

Telstra appears to be particularly worried that the NBN company could, instead of selling retail NBN services itself, instead invest in other telcos that would do so.

“In other words, NBN Co could do indirectly what it is not permitted to do directly, by investing in retail providers,” wrote Telstra.

The Federal Government is already paying Telstra many billions of dollars not only to sell the NBN company its copper and HFC cable networks, but is also paying Telstra even more money for it to help the NBN company upgrade those networks. In doing so, the Government is delivering Telstra a huge cash windfall which will allow it to strongly compete for customers during the transition to NBN infrastructure.

Due partly to this process, but also due partly to idiotic decisions by the ACCC on issues such as the Points of Interconnect issue, Telstra has already managed to pick up more than a 50 percent market share of NBN customers, and it has openly stated that it wants more.

And yet, even this is not enough for Telstra. This submission today explicitly states that Telstra wants the NBN company to be prevented from assisting smaller ISPs at all in helping to develop a competitive market for NBN services.

This is logical behaviour for Telstra: It is a corporation, after all, and has to make money; as much money as possible. Ideally, Telstra would like to have a 100 percent market share for NBN broadband services.

However, Telstra’s whinge should not be taken seriously in the context of the broader NBN ecosystem. The fact is that Australian consumers have less choice now than they have had since the early 2000’s in terms of who they buy their broadband services from, with just three players — Telstra, Optus and TPG — dominating the market.

The NBN company, the ACCC and the Federal Government should be encouraging as many companies as possible to provide services over the NBN infrastructure: Not pandering to the views of major players like Telstra who already dominate the market. Doing so will only further entrench a company which has not exactly proven flexible in responding to its customers’ needs in the past.


    • Remember when Conroy waved the big stick around and said he was going to structurally separate Telstra and had six years to do it?

      Just like their NBN FTTP targets, all hot air.

      • Showing your lack of understanding as usual Alain, NBN co effectively removed the fixed line infrastructure from Telstra control. Shame the libs have made such a hash of it!

        • Which has nothing whatever to do with Labor promising to structurally separate Telstra having six years to do it in and then not doing it at all.

          There was no fixed line infrastructure removed from Telstra in Labors NBN time, effectively the Coalition did that when they got the Telstra copper network and the Telstra HFC for the same price Labor were going to pay them to shut it down at some constantly changing date in the distant future, based on the ever revised downward FTTP rollout target figures.

          • 1. An all FTTP NBN removes the wholesale provider role from Telstra, effectively achieving structural separation. I have not yet heard calls for Telstra to do the same for their wireless offerings as there is still competition in this space.
            2. How can you still stab at Labors rollout of the more advanced NBN when using the same metric against the LNP we should all be expecting 25 Mbps FTTN to every* house in Australia by the end of the year?

          • @Reality

            There was no fixed line infrastructure removed from Telstra in Labors NBN time

            Non sequitur, why would the ALP need to remove Telstra infrastructure when they were building a network that would have entirely replaced it?

  1. So Malcolm has been a very successful Communications Minister and Prime Minister – destroy NBN: tick, ensure big end of town monopoly continues: tick

    • To be fair, the idiotic 140 odd POI’s was really an ACCC decision made under the previous govt.

      • Imagine if you wanted to cover the entire country before the NBN – (irrespective of the number of POIs) – when you needed backhaul – (either on-net or off-net) – into approximately 5,500 locations.

        I doubt the small ISPs would appreciate having to do that.

        • At a small ISP in the 90s and early 2000s, for dial up this was done initially by reselling connect.com’s product, involving different local numbers covering most of the country. Telstra then had a single 019 number option, can’t remember the name of the product.

      • Granted, but the whole FTTN/HFC model has played Telstra (and to a lesser extent Optus) back into a significant “wholesale” role, which is something an FTTP deployment would have greatly reduced.

        • Which should never been allowed to happen. Could PM be looking after Telstra’s shareholders.

          • How does that work, wholesale access to FTTN and HFC is controlled by the company that owns it the NBN Co.

            Telstra and Optus resell FTTN and HFC plans to their customers based on the same NBN Co wholesale rates any ISP can resell to their customers.

  2. the only two ISP which were happy about 141 were Optus and Telstra funnily enough (they wanted over 350 of the damn things).

  3. Liberals are of big business, by big business and for big business. NBN was a great idea and should have remained in the hands of the people, with ISPs across all regions having access, providing the best service at the best price, infrastructure costs amortised over 30/40 years (remember, the way we used to do it).
    I know, I know, its sooo old school…

    • Two strong ideals of the far right of politics.
      1.) Government must not lose money in any project or undertaking. If it is not profitable then the task should not be undertaken.
      2.) Government should not make any profits, if profits are being made then they should be privatised.
      Only leads to one conlclusion really and the NBN has already started down that path.

  4. I know I’m probably upsetting lots of people with my many snarky remarks about what Australia is and is not.

    But consider Telstra. Which Qango/Government Department is the most powerful entity in Australia? Which Qango/Government Department is more powerful than any 5 or 6 major Private Sector companies put together? (The Answer is NOT Australia Post!)

    Has any Australian administration ever managed to even ruffle Telstra’s feathers?

    And we don’t need to forget that Telstra is probably unique in the World, in that no other national telco was ever allowed to market its own brands of comms equipment in retail, in direct competition with PS brands. How many times has Telstra simply told even clients to “ask someone who cares”?

    Many people contributing to these discussions would happily put Labor back in office. Here’s a proposition for Labor pollies seeking our mandate: “Will Labor, as a matter of National Emergency, immediately on taking office as the government of Australia, split Telstra down the middle and reserve all comms tranmission hardware–including all copper not already owned by NBN and mobile phone towers–to a Federal Communications and Transmission Office? Will Labor, as part of this reduction of Telstra, purchase on behalf of such a Federal Communications and Transmission Office all wireless telephone transmission facilities from all private sector operators that own such equipment?”

    OK. Exit stage left from lala-land. NO AUSTRALIAN GOVERNMENT WILL DO SUCH A THING, EVER. They don’t have the cricket balls.

    Telstra is asking for NBN to be prevented from helping out small ISPs so that Telstra can–eventually, but in the visible future–be the sole comms provider in Oz, even if what passes for a Federal Government off-sells the rest of Telstra to the Private Sector. Even if the Feds mortgage Australia’s financial future by repurchasing all those PS shares to nationalise an Essential Service.

    Telstra wants to be the Monopoly. Our governments will ensure it happens. Suck it up.

    • “Has any Australian administration ever managed to even ruffle Telstra’s feathers?”

      Yep. ALP’s original NBN plan. The result is the lobbying for the changes that the LNP caved in to once blood was in the air regarding political future of ALP in government.

      • Yeah, well. The ALP is really its own problem, isn’t it! Unfortunately, that–by default–becomes our problem. So how do we stack the membership of the ALP to civilise it and teach it how to run a nation into glory rather than into the ground?

        • Considering the only times the country has been in a financial shambles is off the back of a Liberal government, what are you basing that question on?

    • “Telstra is asking for NBN to be prevented from helping out small ISPs so that Telstra can–eventually, but in the visible future–be the sole comms provider in Oz, even if what passes for a Federal Government off-sells the rest of Telstra to the Private Sector. ”

      Isn’t Telstra already completely private and no-longer Government owned in anyway?

  5. Hilarious!

    So everybody should be treated equally, big RSP or small, unless Telstra says that, and then that is unfair, and small ISPs should get a leg up.

    Sounds like a book George Orwell wrote about some pigs.

    No need to wonder why the rabid Labor NBN fanboy crowd have no credibility.

    • Telstra and Optus lobbied for and got 121 PoI from the ACCC making small ISP’s uncompetitive.

      That happened under Labor and was total crap.

      That decision massively limited competition on the NBN I guess if you like living with a 3 players in the market.
      It sure works great for the Supermarket situation.

      • … and the banks, and petrol and …..

        Simon Hackett did the maths when he sold Internode and basically said at the NBN Co pricing with CVC/AVC etc + back haul to all those 121 POI’s an ISP realistically needs at least 250k customers to in all likelihood break even.

    • “No need to wonder why the rabid Labor NBN fanboy crowd have no credibility.”
      What on Earth has this situation got to do with the Liberals-created communications monopoly?

      • How does this Coalition ‘monopoly’ differ from the now obsolete Labor NBN model, which I assume you are holding up as a shining example of how it should have been done?

        • Public vs Private monopoly. Telstra as the monopoly has a track record of doing everything in its power to advantage their own shareholders instead of encouraging competition.

          • Access and pricing on monopoly infrastructure owned by Telstra or the NBN Co is under the legislative control of the ACCC, this includes backhaul links in the absence of alternative backhaul links.

            I am not aware the ACCC is factoring in ‘looking after Telstra shareholders’ in their pricing decisions on Telstra infrastructure.

          • And how many times in the past have Telstra had to front the ACCC? I personally have previously been on a Telstra plan that was a fraction of the cost of what Telstra were offering to wholesale providers.

            Looking over at electricity pricing which is also meant to be highly regulated, the industry has been able to game the system to increase their own profits despite the direct oversight.

            ACCC looking after Telstra shareholders is cute, but was never my assertion.

  6. Access and pricing on monopoly infrastructure owned by Telstra or the NBN Co is under the legislative control of the ACCC, this includes backhaul links in the absence of alternative backhaul links.

    I am not aware the ACCC is factoring in ‘looking after Telstra shareholders’ in their pricing decisions on Telstra infrastructure.

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