The Coalition is keen for the government buy-back of Telstra's copper network as part of the National Broadband Network Company (NBN Co)'s deal with the telco worth $11 billion — just in case the party needs it for its own broadband policy.
At yesterday's Joint Standing Committee on the NBN, Coalition members including Shadow Communications Minister Malcolm Turnbull quizzed both NBN Co CEO Mike Quigley and Telstra executives on the value of Telstra's existing copper network, questioning why NBN Co is not seeking to claim ownership of the existing copper network as part of the deal to lease the pits and ducts from Telstra and move customers over to the NBN.
Turnbull has previously indicated that, should the Coalition win government, the NBN would likely be rolled back from a fibre-to-the-home project to a fibre-to-the-node project. For NBN Co to continue to exist as a wholesale provider, it would require access to Telstra's copper network from the node to the premise.
Quigley told the committee yesterday that, as the government had not directed him to investigate the possibility of keeping the copper network as part of the negotiations we Telstra, he could not say whether it was possible.
In a blog post this morning, Turnbull said that should a future government wish to go down this path, taxpayers would have to pay more money to Telstra on top of the $11 billion deal.
"It is quite incredible, mind boggling really, that a government would pay a private company $9 billion to decommission a network asset but not reserve for itself, as part of the deal, the right to use as much of that network as it chose," he said.
"But that's the real world — and unless there is a change of direction on the part of the government, the Telstra/NBN deal will not simply deliver Telstra a $9 billion windfall but in addition set Telstra up to receive more billions when inevitably a future government, Liberal or Labor, seeks to redesign the network topography in a way that reduces the crippling capital cost of the fibre-to-the-home design without compromising the promise of universal very fast broadband."
Turnbull cited a technology white paper by Quigley's former employer Alcatel-Lucent that said high speeds could be delivered over a fibre-to-the-node approach, but it would cost up to 50 per cent less than a fibre-to-the-home network. Turnbull said that it is now up to Communications Minister Stephen Conroy to ensure that the copper network is included in the Telstra deal.
"Is he going to give NBN Co a direction to act in a commercially rational way and reserve the right to use some or all of the copper network it is paying Telstra to junk? Or is it going to continue to set Telstra up for another big pay day when, inevitably, a more rational, cost effective approach to network design is undertaken?"
Telstra's director of government relations James Shaw told the NBN inquiry yesterday that he couldn't put an exact figure on the value of Telstra's copper network, except to say that it would be worth billions of dollars.
"It depends on how much the copper you want. There is an element of 'how long is a piece of string' in that question," he told Turnbull. "I'd like to seek some advice before anyone draws a conclusion."