Telstra: It's a B-grade slasher movie

Summary:In what the telco likens to a B-grade movie, Telstra says its rivals have forgotten about the goals of the National Broadband Network (NBN) and are instead using it and the government to gain market advantage and tear the incumbent apart.

In what the telco likens to a B-grade movie, Telstra says its rivals have forgotten about the goals of the National Broadband Network (NBN) and are instead using it and the government to gain market advantage and tear the incumbent apart.

"It's like watching a B-grade slasher movie but, in this film, the knives are out for millions of Telstra customers and shareholders," Telstra group MD, public policy & communications Phil Burgess said in a statement.

The calls for separation are not for the good of the nation, according to Burgess, but a ploy to kill the competition.

"In a case of clear vested interest, they actually want to use separation as a means to reduce the competition they face in their particular markets," he said.

It's Telstra against the world, according to Burgess: "Mobile operators want to see Telstra's mobiles business broken up; ISPs want BigPond broken up; content providers want BigPond and Foxtel broken up; telcos want to put an axe to the lot; and Acacia wants to shield its NBN from all competition, even from wireless. Google, of course, wants everything for free."

"The most likely outcome in all the gaming that is now going on is even more delay in building the NBN — or, even worse, that the NBN may never be built at all."

How open is Telstra's open access?
Telstra itself has copped some flack from the Competitive Carriers' Coalition (CCC), which represents non-dominant Australian carriers.

The Coalition is concerned about Telstra's "open" access, saying the telco is being deliberately vague in its submission around what form of wholesale access it will be providing.

Telstra has stated that open access should apply to "bottlenecks" in the network, an economic term for a piece of infrastructure that is unique — or a monopoly.

The problem with such a definition is that not all parties have the same idea of what comprises a bottleneck, according to Ovum telecommunications analyst David Kennedy.

"They're deliberately vague at the moment because they want to negotiate details with the government," he said.

When asked to clarify exactly what the company meant by "bottleneck", a Telstra spokesperson said: "We can't discuss what is going into our bid. I don't think any of our competitors would be able to offer that sort of detail."

Ovum's Kennedy said the term "bottleneck" could mean only the most basic components of the network would be available to access seekers.

Telstra's argument is, according to Kennedy, that if it is technically and commercially feasible to build competing elements of the network, Telstra shouldn't be forced to provide open access.

It is even possible, he said, that fibre and cabinets not be considered as bottlenecks, with rivals having to build their own.

"What's technically feasible and commercially viable is open to interpretation and changes over time," he said, using DSLAMs as an example. At first there was not much interest in putting DSLAMs into place, but then their price came down, making it commercially viable.

The CCC says such an approach is wasteful and not economically viable, and that if the proponent had to be structurally separated, that there would be no reason to operate that way.

"Under the separated network model proposed by every other telecommunications participant, the network owner/wholesaler would have no reason to withhold some services from any retail competitor," CCC executive director David Forman said in a statement.

"In fact, a separated wholesaler would have an incentive to offer the most options to the most competitors to drive consumer interest and uptake," he said.

Forman says Telstra's model transfers the risk from itself to consumers and competitors.

"It has presented a model of industrial organisation that would have been right at home in the Soviet Union, except that Telstra has assumed the role of the all-powerful State," Forman said.

Telstra says, however, that it is offering an open network. "The commitment we'll be offering is an open access network. People will be able to offer the same sort of retail services that we'll be offering, but there'll also be the opportunity to differentiate themselves," the spokesperson said.

Topics: Broadband, Government, Government : AU, NBN, Telcos, Telstra

About

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for t... Full Bio

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