Coalition to pay Telstra faster than NBN Co

Coalition to pay Telstra faster than NBN Co

Summary: Shadow Communications Minister Malcolm Turnbull has claimed that Telstra would be paid faster for its copper network under the Coalition's broadband plan than under the current $11 billion agreement with NBN Co.

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Shadow Communications Minister Malcolm Turnbull has claimed that Telstra would be paid faster for its copper network under the Coalition's broadband plan than under the current $11 billion agreement with NBN Co.

Earlier this week, Turnbull indicated that under the Coalition's broadband plan for fibre to the node (FTTN) for most existing premises in Australia, the Coalition government would acquire from Telstra the copper line between the node and the premises.

In response, Communications Minister Stephen Conroy questioned how Turnbull plans to renegotiate with Telstra to pay for this part of its network.

"Valuing assets is always tricky. In this case, it comes down to either what price Telstra is prepared to accept or what price a court would consider 'just terms' for the acquisition of property," Conroy said.

This morning, NBN Co CEO Mike Quigley told ABC radio that an FTTN network would be "quite difficult to achieve", and that "Telstra are not keen to sell" the copper network.

Turnbull said in a subsequent interview on ABC radio that NBN Co failed in its negotiations with Telstra to secure the right to use the copper, when instead it will just become obsolete when the customer is moved across to the fibre and Telstra is paid as part of the $11 billion deal with the government. Turnbull said that he doesn't think there would be any problem to renegotiate to get the copper from Telstra.

"I don't foresee any problems in reaching that agreement with Telstra," he said. "If you had a fibre to the node deployment ... take the copper, agree to have access to the copper, Telstra would actually be paid for decommissioning its network sooner. It wouldn't get paid any more, but the payments would come in sooner, because you would be able to roll out your network upgrades faster."

Turnbull also took aim at Quigley's comments that 758,000 premises would be passed or be under construction in 2012.

"It's a very slippery use of language. In the fibre business, there are really two metrics that are relevant. One is how many premises you actually have connected and are actively using a service, and the other is how many premises you have passed."

Turnbull said that claiming construction would commence for 758,000 is not a true indication of houses that will be actually connected to the NBN in 2012.

"You may as well say construction is underway for 12 million households. It's this Orwellian language; they're not being straight."

Quigley this morning defended take up on the network, saying that 25 per cent uptake — 5500 of the 18,000 premises connected — would be an envious result in the telecommunications industry.

"Take-up rates on the fibre are ahead of what we expected," he said. "Telcos around the world would be quite envious of those sorts of numbers."

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

About

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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10 comments
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  • "Turnbull said in a subsequent interview on ABC radio that NBN Co failed in its negotiations with Telstra to secure the right to use the copper, when instead it will just become obsolete when the customer is moved across to the fibre and Telstra is paid as part of the $11 billion deal with the government".

    OMG, why would NBNCo negotiate to use the superceded copper/technology (which it is), when the plan is and rightly so, to totally decommissioned the old and obsolete copper and replace it with fibre.

    Does Turnbull actually believe anyone is silly enough to believe that BS? Actually I retract that, of course the sheep are, what was I thinking.
    Beta-9f71a
    • Turnbull has it all figured out.

      Step 1: Have NBNco pay Telstra billions for a redundant copper network they have no plans on using.
      Step 2: Criticise Gov and/or NBNco for "spending taxpayers money" on something they don't use and completely trash.
      Hubert Cumberdale
    • I read Turnbull's comments, including his squawk about "slippery" and "Orwellian" language. Oh really, Mr Turnbull? Tu quoque, I would have thought. You claim that there is "no budget" for the NBN. What would all those dollar figures be in the Corporate Plan, then? Or is that not a "real budget"? Who's being slippery now?

      And did Turnbull sleep through the hard, drawn out, no-quarter-given negotiations between NBN Co and Telstra? Does he not realise the strength of Telstra's hand, and that they have the capacity and inclination to play that hand for all it is worth?

      When you've publicly declared that your entire policy depends on ripping up one perfectly good deal, and then buying the copper from Telstra - you've just given Telstra the rope to hang you with! Seriously, if they know you're desperate to buy the wretched stuff, they will price it SKY HIGH. And they absolutely will. They will make you pay in blood and life and limb - because you've already declared that you need it to avoid political embarrassment!

      How. Not. To. Negotiate. 101.
      Gwyntaglaw
  • Given the standard of maintenence on the CAN in recent years, it's not hard to see (for anybody but the politically one-eyed) that by the time NBN is completed in ten years time, the CAN will effectively be RS anyway.

    Outlaying a lot of money on FTTN which will be obsolescent before it is finished, and which will later cost a lot more money to remove before a proper FTTP rollout can be done, is something that only a particularly perverse political mind could contemplate, let alone attempt to sell as serious comms policy.
    anonymousI
  • FTTN is obsolete even before one shovel of dirt has been turned over to begin building it, even the idea of a FTTN network is obsolete.

    If Turnbull really thinks that there won't be any issues renegotiating a deal with Telstra then he is an even bigger moron than I thought he was. The reason why the NBN is behind schedule is because the negotiations with Telstra took longer than expected because as Mike Quigley said "Telstra are not keen to sell" thir CAN.

    I don't know how Turnbull expects to negotiate a better outcome. It sounds like Turnbull wants to pay the same ($11 million) for less (just the parts of Telstras CAN between a customer premise and the exchange), or maybe he thinks he can renegotiate and get a better price for using a smaller portion of Telstras CAN?

    Either way Turnbull is living in La La land.
    Jingles-8366c
  • Turnbull is fast becoming the politician who cried wolf. Even when he has a valid arguement, people have stopped listening as he complains about every little thing.
    mwil19-a34f7
  • Can someone confirm when the 11Bn will be paid to telstra, I heard it was early into the NBN build, what if the NBN is cancelled, does that mean the govt just blew away 11Bn? Did you hear about the Desal plants, a $4bn write off for victorian taxpayers? Dams are getting full and the Desal keeps running pumping water into the sea... great.

    Btw. if the average user bandwidth use today is 4mbps given the standard, and the average speed of
    Avatar1aaa
    • To user0000....1:

      This article says that there are break clauses in the agreement between NBN and Telstra and that Telstra only gets compensated if more than 20% of NBN has been rolled out. It doesn't say how much compensation.

      http://www.abc.net.au/news/2012-02-28/accc-approval-for-telstra-split-does-not-guarantee/3858366
      agreenfield17
  • If I understand correctly, the only reason Telstra is giving up it's copper is because there's a genuine plan to replace it. Absent that reality, they wouldn't be selling it.
    agreenfield17
    • Telstra wanted to ditch their copper years ago and build a fibre only network; they knew copper was on the way out BUT the only caveat was reduced access for competitors. The Government rightly rejected the idea, but if Telstra wasn't going to build a full fibre network, who was? It's splitting hairs but NBN is buying the pits and conduits from Telstra, they will ditch the copper as it gets in their way. As an interim bonus the NBN deals forces Telstra to give a better deal for copper to other retailers, in fact it came into force this week with the ACCC's blessing; not that you'd know from the infinitesimal coverage given to it by mainstream media.
      rocketfire