Telstra won't get one cent extra from Coalition's NBN: Turnbull

Telstra won't get one cent extra from Coalition's NBN: Turnbull

Summary: Shadow Communications Minister Malcolm Turnbull has reiterated his claim that Telstra will not get any more money under the Coalition's broadband policy.

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TOPICS: NBN
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Less than two weeks out from election day, Shadow Communications Minister Malcolm Turnbull has said that he is confident the Coalition can get access to Telstra's copper line from the node to each premises under the Coalition's National Broadband Network (NBN) policy without having to pay Telstra any more money.

Under the current agreement, Telstra is paid approximately AU$1,500 per premises that is disconnected from the copper service and transferred over to the National Broadband Network. The payments are made as each premises disconnects and moves over to the NBN. The deal in its current form took the Labor government and NBN Co close to two years to negotiate with the incumbent, and Telstra retained ownership of the copper line as part of the deal.

Under the Coalition's policy, approximately 71 percent of premises will connect to the NBN through fibre to the node, with the Coalition hoping to access the last section of copper from Telstra. The AU$29.5 billion price tag included in the policy assumes that Telstra will not receive any extra money.

But given Telstra's lengthy negotiation for the current deal, many have speculated that it will seek to drag out the negotiations with a future Coalition government and seek more money from the potential government that needs to turn around the project in time to deliver at least 25Mbps download speeds by 2016.

Turnbull, however, continues to hold the belief that Telstra will not be paid any extra, telling Sky News yesterday that the copper "has no economic value" for Telstra.

"We're not proposing to pay them anything," he said. "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."

Turnbull also said in the interview that should the Coalition win the election, he is looking forward to being the new communications minister.

"The answer is Tony's [Abbott] made so many commitments that I will be sorting out the NBN I think I can safely say I've got every reason to expect to remain in the portfolio I have. I'm really looking forward to it. I'm relishing the prospect, and I've got no doubt that if we win I will be the minister for communications and broadband."

At the Coalition's campaign launch on Sunday, Opposition Leader Tony Abbott committed to releasing a new business plan for the NBN within the first 100 days of taking office. NBN Co itself has not yet submitted its new business plan to the Cabinet, despite preparing the document for release in May. It is understood that part of the reason for the delay in submitting the new document to Cabinet was due to Telstra's suspension of remediation of its pits and ducts in the wake of community concern about contractors' handling of asbestos material.

It comes as Labor steps up the attack on the Coalition's broadband policy, today launching a second campaign website for the NBN. The "Abbott's Internet" site used Facebook and Vox pops in an attempt to sell 25Mbps plans to the public in Asia, the US, and Europe. The website's claim that Abbott's Internet proposes to deliver 25Mbps download speeds by 2019 is in contrast to the Coalition's actual policy proposal of delivering at least 50Mbps download speeds by 2019.

Topic: NBN

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Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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18 comments
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  • Turnbull "I'm relishing the prospect"

    To build a third rate national broadband network.
    Something to be remembered for.
    frank0-3f91e
    • Please help out and tell all your friends/family! Cheers.

      I have started a petition to strongly urge the coalition government to reconsider their FTTN NBN proposal in favour of a superior FTTH NBN. Please show your support for this issue by signing the petition and leaving any comments/thoughts at the following link:

      http://www.change.org/en-AU/petitions/the-liberal-party-of-australia-reconsider-your-plan-for-a-fttn-nbn-in-favour-of-a-superior-ftth-nbn

      Please spread the word, and refer as many of your friends and family as possible. Additionally, feel free to raise further concerns to Tony Abbott, Malcolm Turnbull, and the coalition government by sending them an email or written letter to the addresses below.

      Tony Abbott:
      phone: (02) 6277 4022
      fax: (02) 6277 8562
      website/email: http://www.tonyabbott.com.au/ContactTony.aspx
      address: Parliament House
      RG109
      Canberra ACT 2600

      Malcolm Turnbull:
      phone: 02 6277 4144
      fax: 02 6277 8445
      website/email: http://www.malcolmturnbull.com.au/contact
      address: PO Box 6022, House of Representatives
      Parliament House, Canberra, ACT 2600

      Liberal Party Federal Secretariat:
      phone: 02 6273 2564
      fax: 02 6273 1534
      email: libadm@liberal.org.au
      address: PO Box 6004,
      Kingston ACT 2604


      Thank you for your support.
      Thepeopleof Australia
  • Worthless???

    Lets build FTTN using the last mile copper and tell Telstra that their copper is worthless. What are you smoking Malcolm?
    blakhawk70
    • Seems strange

      The Turnbull is saying the copper is worthless, yet its something the proposal relies on to deliver...

      Strange, very strange.

      If its a key component, by extension it has value. And the Telstra board would be irresponsible to its shareholders if it doesnt collect on that value.

      If they do gift it, I see a whole bunch of shareholders taking the Telstra board to court over it.

      If its worthless, try and build a FttN network without it...
      Gav70
    • $$$ in Line Rental?

      No problem. Telstra accepts $11B for use of its ducts & customers then simply gifts Turnbull permission to connect his nodes to their last mile copper after which Telstra continues charging the public ever increasing monthly Line Rental on top of their ISP's NBN fees for using Thodey's "good for the next 100 years copper".
      Possibly much "faster & cheaper" for Turnbull but not for the end users.
      Sultanabran-
  • Guaranteed 50Mb/s on copper? Pixe dust dreaming.....

    '...the Coalition's actual policy proposal of delivering at least 50Mbps download speeds by 2019.'

    Well, I'm glad that you, Josh, at least understands it is only a "proposal". I am totally sick and fed up with other technology websites claiming it is 'guaranteed' or 'a certainty'. It isn't - it is a 'cross-my-fingers-and-wish' figure, and there is a distinct possibility that it will not occur for the vast bulk of subscribers (>80%) connected to a FTTN network - IF indeed such a network ever gets built at all.
    Mikeinnc-d63ee
    • not to mention

      that 50Mb/s isn't good by international standards anyway
      theoilman
      • Lol agreed oilman

        Very funny. Was watching the Dutch news the other day on SBS. The telecoms there are increasing their broadband speed for the majority of the Dutch people from 150Mbps to 500Mbps. 150Mbps was left wanting by the majority of businesses.

        Oh the irony of building a 50Mbps network (IF THAT - I agree it's impossible over OUR copper), when fibre will give us instantaneous access to 1Gbps capability and beyond (I'm reading articles on fibre reaching 99.7% of the speed of light, transferring at over 70 Terabytes per second!!!)

        http://www.extremetech.com/computing/151498-researchers-create-fiber-network-that-operates-at-99-7-speed-of-light-smashes-speed-and-latency-records

        OK, so our current fibre that we are rolling out hasn't reached that, but NTT reached 69.1 Tb/s over a distance of 240Km!

        http://en.wikipedia.org/wiki/Fiber-optic_communication#Record_speeds

        Try that with copper. Yeah right.

        I cannot believe we're going to be building a substandard NBN for 30b come September. It's a gob smacking awful proposal.
        Ramrunner-5dd3e
    • Lets go to the policy document

      p8:
      "We will issue a revised statement of expectations directing NBN Co to provide broadband services with a minimum download data rate of 25 megabits per second by the end of 2016 in all areas of australia, and 50 megabits per second by the end of 2019 in 90 per cent of the fixed line footprint. The goal assumes the current NBN Co satellite and fixed wireless networks are deployed on schedule."

      The revised statement of expectations will require they deliver the above minimum speeds. This is achievable with the technologies proposed, your "distinct possibility" of this occurring for even a majority (not the >80%) is unsupported by anyone but ignorant FTTH fanboys, countered in many real world markets where FTTN has already been deployed.

      The are reasons to attack the Liberal policy (aggressive timetable, govt spend, capacity limitations, etc) but "it won't work" is ridiculous.
      Richard Flude
      • How about...

        "The are reasons to attack the Liberal policy (aggressive timetable, govt spend, capacity limitations, etc) but "it won't work" is ridiculous"

        It being a dead end technology that will require replacing straight after it's completed.
        Oh, if only the world would stand still and stagnatte like you, it would be a good plan.
        Pilfer-52cec
  • HUH?!

    So lemme get this straight, telstra will get the same amount... while still having to spend OPEX on maintaining a majority of copper lines that give inferior service (more customer complaints).

    In what capacity does this make any sense...
    Demon Down Under
  • Important budget consideration

    If NBNCo acquires the CAN the $11b payment should be treated as capex; currently opex to make Labor's plan look less expensive than it really is (quote $37b when total cost to breakeven is over $60b).

    Potentially this could have budget implications, changes to IRR. The ABS granting of PNFC status must be reviewed. This will be news to the ignorant RSes of the world.
    Richard Flude
  • Another point or two

    The moment an agreement is signed Telstra's customers on the CAN have been transferred to the NBN and the transfer monies fall due. Then the issue of other RSP services on that CAN.

    Then we have all those copper staff, faults, maintenance, install depots and stores around the country, the infrastructure to support them all.
    The physical copper is just a small aspect of the overall cost, especially long term.
    Will those divisions of Telstra be transferred to NBNCo along with all Employee obligations, entitlements etc. or will there be a very lucrative maintenance contract over the next 30 years appearing as Opex and hiding the real cost.
    Asbestos obligations. Remain with Telstra as they will still own the Pits pipes and ducts (maintained by the same divisions that look after the copper) that NBNCo LEASE off them.
    on a fit for purpose basis.

    "If NBNCo acquires the CAN the $11b payment should be treated as capex"

    It consists of LEASING Costs for infrastructure, plus a component of paying for customer transfer.
    So you consider leasing costs to be CAPEX, interesting.

    Costing to both policies must be treated the same to 2030 including CAPEX, OPEX and Income and financing costs

    AT&T is just upgrading their FTTN and FTTP to 24/3 from 18/1, low take up as no great benefit over ADSL2+, of course low fault incidence as a) .64 copper is standard and well maintained, and b) Plenty of fault tolerence when only expected to deliver at ADSL2+ equivalence
    Abel Adamski
    • I'm surprised (again)

      What's the future of the staff under FTTH? Enjoying the irony;-)

      Last mile copper will need to be supported if retained; just as it will in the regions under Labor's proposal. This will cost money.

      "So you consider leasing costs to be CAPEX, interesting."

      I said if the CAN was acquired by NBNCo. This wouldn't be a lease. "Interesting" indeed.

      True all costs should be disclosed; I fought for this in this very forum for years (abused for it).

      AT&T internet capacity is restricted because it is a triple play service; including payTV like the one's you said we're impossible using FTTN.

      Labour the bigger cost component. I'm happy to read any link to support your FTTH vs FTTN opex claims. Best info I have today is the actual experience from AT&T.

      Perhaps life's better over at delimiter?;-)
      Richard Flude
      • Focus

        We are not talking of the future of the staff, as you identify in rural areas the requirement will still be there. The staff maintaining the pits ducts etc will still be required.
        What is the point is that that cost of that will now be borne by NBN Co plus the maintenance and operational costs of the powered cabinets which in Aus many will need active cooling.
        M.T qoutes cost per FTTN premises as approx $900, NBN quotes cost per FTTP premises as approx $2,500 on average and falling as techniques and efficiencies are developed and refined. so $1,600 difference, plus as passive nodes etc, lower opex with lesser maintenance. That is assuming the copper is pristine and the joints etc perfect. Remember every single pair will need to be tested, joints reterminated, copper cables replaced, expect a blowout in costs.

        Early 90's Telstra had over 100,000 staff, now 30,000, there have been many redundancies and people like you have considered that good. Ahhh the irony

        If the CAN was acquired by NBN Co. M.T is talking the last mile of copper. The actual total CAN has been valued at up to $30Bill. The pits ducts etc are and will remain Telstra's very valuable property which is LEASED for 30 years.

        AT&T's triple pay, has not been particularly successful in competing with the Cable Providers, the product and technology is inadequate and limited. Verizon faces the same problem.
        Do some research re the actual rather than touted for shareholder/political benefit situation and the actual take up rate, the US carriers consider our NBN's Take up rates to be phenomenal.

        M.T's figure of 1/3 - based on his figure of $94Billion plus for FTTP
        Abel Adamski
        • No

          "What is the point is that that cost of that will now be borne by NBN Co plus the maintenance and operational costs of the powered cabinets which in Aus many will need active cooling"

          Acknowledged (several times); costs are insignificant in the total cost.

          "M.T qoutes cost per FTTN premises as approx $900, NBN quotes cost per FTTP premises as approx $2,500 on average and falling as techniques and efficiencies are developed and refined."

          Turnbull's cost actually on the high side if looking at actual real world deployments. NBNCo hasn't got anywhere near their $2.5k estimate, costs are increasing not decreasing. Your lower opex for fibre is again marginal according to those with both deployed.

          "Early 90's Telstra had over 100,000 staff, now 30,000, there have been many redundancies and people like you have considered that good."

          Reflects the changes in technology and labour required. Better they were moved on than all employed like under telecom and consumers carrying rising costs.

          "Do some research re the actual..."

          (Again) Links please?

          "M.T's figure of 1/3 - based on his figure of $94Billion plus for FTTP"

          Actually no, just the fibre component ($10b vs $27b). Backhaul, satellite and wireless remain the same ($10b).
          Richard Flude
  • Stupification - Commitment to Copper for the Next Century.

    The coalition's plan to build on a 19th century copper technology makes the mind border on stupification. Opportunities such as the NBN presented to the people of Australia only come along once in an eon - to think that the coalition is going to squander and tear it down is not only heartbreaking it is almost criminal in its impact to the future of Australia.

    The copper network is failing, it is riddled with poor joints and requires an inordinate amount of maintenance. To think that we will build the next generation of broadband on top of this leaves one speechless. This will be a boon for Telstra - once again they will interpose themselves between us and all possible competition. Turnbull's is a cretin.
    uandme314
  • Please show your support and spread the word to family/friends! Thanks

    I have started a petition to strongly urge the coalition government to reconsider their FTTN NBN proposal in favour of a superior FTTH NBN. Please show your support for this issue by signing the petition and leaving any comments/thoughts at the following link:

    http://www.change.org/en-AU/petitions/the-liberal-party-of-australia-reconsider-your-plan-for-a-fttn-nbn-in-favour-of-a-superior-ftth-nbn

    Please spread the word, and refer as many of your friends and family as possible. Additionally, feel free to raise further concerns to Tony Abbott, Malcolm Turnbull, and the coalition government by sending them an email or written letter to the addresses below.

    Tony Abbott:
    phone: (02) 6277 4022
    fax: (02) 6277 8562
    website/email: http://www.tonyabbott.com.au/ContactTony.aspx
    address: Parliament House
    RG109
    Canberra ACT 2600

    Malcolm Turnbull:
    phone: 02 6277 4144
    fax: 02 6277 8445
    website/email: http://www.malcolmturnbull.com.au/contact
    address: PO Box 6022, House of Representatives
    Parliament House, Canberra, ACT 2600

    Liberal Party Federal Secretariat:
    phone: 02 6273 2564
    fax: 02 6273 1534
    email: libadm@liberal.org.au
    address: PO Box 6004,
    Kingston ACT 2604


    Thank you for your support.
    Thepeopleof Australia