Telstra's land-grab opportunity

Telstra's land-grab opportunity

Summary: What will happen if Telstra starts rolling out fibre-to-the-node VDSL services?

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TOPICS: Telstra, NBN
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A couple of weeks ago, Twisted Wire looked at Project Top Hat, with Telstra rolling out DSLAMs above RIM cabinets. It fixes a broadband blockage problem, but prevents exchange-based infrastructure competition.

This week, I look at what will happen if Telstra extends the project and starts rolling out fibre-to-the-node (FttN) VDSL services, meeting the public's thirst for speed but isolating competitors' DSLAMs in the process. Australian Competition and Consumer Commission (ACCC) commissioner Ed Willet doesn't see a problem, because existing regulatory controls require such investments to be open access and sold on at NBN Co prices. He adds that with the National Broadband Network (NBN) on the horizon, such a move by Telstra is highly unlikely.

The opposition, of course, is keen to see an end to the NBN in its current form, with infrastructure competition key to its policy. Would the ACCC be as satisfied that the regulatory controls are in place if there is no NBN on the horizon? Surely, structural separation of Telstra becomes a pressing need.

I asked Paul Fletcher, federal Liberal MP for Bradfield and former advisor to Senator Alston, whether they can really push ahead with their plans without splitting up Telstra first. Currently, separation comes through the build of the NBN. Without it, Telstra remains the vertically integrated dominant player of old.

In its current form, with a change of government, Telstra could use the uncertainty around policy as an opportunity for selective investment and a land grab for high-speed broadband customers. In fact, with their upgrade of the HFC network and their Top Hat project, hasn't this land grab already begun?

Running time: 29 minutes, 42 seconds

Topics: Telstra, NBN

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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2 comments
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  • Realities.

    Sold on at NBN prices.
    Selling what?. Judging by existing Telstra Fibred areas what is "Sold On" is purely rebadged Telstra, so while technically "retail competition". it is just a farce. No choice in retail product or infrastructure and we still have Telstra with their poor copper maintenance record in control

    Telstra's NBN plans at much higher than the others, plus they insist on renting a landline on top with expensive phone call structure, so in fact more expensive than their ADSL product. I suggest to discourage migration to the NBN. As they especially in Rural and the new FTTN (Top Hat) areas have the majority of subscribers that will ensure a low NBN take up rate.
    Gives Abbott who only recently indicated to Jon Faine that he would sell off the NBN as the Pivate Sector can do it better (A Little naive and thick methinks - track record completely fails to register)
    Considering the Billions committed to Telstra and any penalties, odds on Telstra will end up with all the assetts and the nations Telecommunications future is very poor, especially if Vodaphone quits (very likely if NBN goes).
    We will be at the mercy of the Rapacious Telstra shareholders
    Abel Adamski
  • 4 questions about developing high speed internet...

    I have 4 questions I would like to understand better
    1) Why is the NBN being rolled out next year in areas which already have HFC or VDSL? Surely they should be last on the list?

    2) Why isn't VDSL2 available from Telstra exchanges now? You mentioned some technical reasons, and I know there have been issues that other countries have had to work out, but could you clarify why we can't have this. And of course not just from exchanges - why is it that we can't add VDSL2 to RIMs also?

    3) We have 3 networks in much of Sydney & other capitals - Telstra PSTN, Optus HFC, and Telstra HFC. If we want competition they need to be 3 separate companies. When people talk about separating Telstra, they always break apart infrastructure from the retail. Surely we could talk about separating just the PASSIVE copper network, ducts, and exchange buildings? The spun off company would just rent out the ULL copper, maintain the copper & ducts (often with Telstra contractors), and manage access to the exchanges. Let Telstra (for now) be the only wholesaler with RIMs on this network, but start opening that up too. This encourages Telstra to use their HFC network.

    4) NBNco must know the approximate cost of getting fibre into a home. How about paying 2/3 of that to any provider who does that job for them early. If Optus wires HFC into a home, encourage them to add fibre (to NBNco's requirements) at the same time, and pay them for that. It'll save NBNco money, and make sense for Optus (or Telstra or TransACT etc).

    If any of the above is of interest to you, or you know the answers, I'd like to learn more!
    GregA_z