Fujitsu NBN deal unnecessary: fibre firm

Fujitsu NBN deal unnecessary: fibre firm

Summary: The National Broadband Network Company (NBN Co) would not need to pay Fujitsu $100 million of taxpayer money to install fibre to new housing developments if funds for Universal Service Obligation (USO) were redirected to existing providers, according to fibre company Openetwork's CEO Michael Sparksman.

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TOPICS: NBN, Broadband
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The National Broadband Network Company (NBN Co) would not need to pay Fujitsu $100 million of taxpayer money to install fibre to new housing developments if funds for Universal Service Obligation (USO) were redirected to existing providers, according to fibre company Openetwork's CEO Michael Sparksman.

Fibre

(Optic fibre image by Hisa Fujimoto, CC BY-SA 2.0)

This morning NBN Co announced that it had signed up Japanese tech giant Fujitsu to roll out fibre to new housing developments — known as greenfields — in a deal expected to be worth $100 million in the first 12 months.

With the deal now in place, Sparksman told ZDNet Australia, Fujitsu and NBN Co would be putting commercial fibre companies such as Openetworks out of business by offering developers to install this fibre upfront for no cost.

"Even Telstra charge for the upfront costs of building a network, they used to charge for a build cost in the Greenfields for around $3500 to $4000," he said.

To keep competition in the industry vibrant, Sparksman suggested redirecting the $1000 per premise that Telstra receives in order to meet its universal service obligations (USO) to provide a landline service to every household directly to fibre providers to install fibre at these new premises.

"Instead of giving Telstra the $1000 per connection, which is equivalent to $145 million annually, they could give that $1000, which effectively — with a relatively small connection fee that the commercial operators would have to pay — would build an NBN-quality network without the need for the NBN at all," he said.

"That same amount of money is all that the developer would require for you to obviate the need for NBN to be in greenfields at all."

Since the announcement last year that NBN Co would guarantee that all new developments with over 100 premises would receive NBN-compatible fibre, NBN Co's intention has been to be the fibre provider of last resort for new developments. According to Sparksman, however, developers were opting instead straight for NBN Co fibre first rather than paying existing fibre companies to install the fibre.

As a result, Sparksman has been meeting with the Productivity Commission's Australian Government Competitive Neutrality Complaints Office, which is investigating whether NBN Co's greenfields guarantee is anti-competitive towards existing fibre providers.

Sparksman said that meetings with the office were progressing, and said that he would be giving a presentation on the matter to the parliamentary committee on the NBN in Sydney on Monday.

USO currently remains the domain of Telstra; however, as part of the $11 billion deal with the government and Telstra, USO will be relinquished to a newly created government-owned entity known currently as USO Co.

NBN Co and the office of Communications Minister Stephen Conroy were contacted for comment but had not responded at the time of publication.

Topics: NBN, Broadband

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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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3 comments
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  • most outer suburbs of sydney have very limited access to proper internet, get your facts right before making assumptions.
    Optus said they can not provide me with any internet in kingswood, and telstra said only option was very expensive wireless and i mean very expensive when you have to pay 100 dollars for 6 gigs of data, and thats not monthly, thats prepaid, you will understand, your other option is to have a house phone installed, whether you need or want it, then once the home phone is installed you can have adsl over the copper phone line from telstra, yet i live 5 mins from a major hospital and the western sydney university, and the major companies havent run out cabling, because they dont want too
    blackninj@...
  • What’s your point?
    Thanks the Howard Government and Private Enterprise for putting you in this situation. The USO is only valid until 2012. Telstra like other private sectors focus on Business cases where Outlay of infrastructure equals profits. You and 20Million other Australians will benefit from a Whole Sale Layer 2 Product that NBN will deliver. It had to get to this so a Major National Project Like NBN can take off. This National Broadband Network is as important to Rail, Power and Roads that built this country .
    The Likes of the Liberals that bury their heads in the ground and think wireless will save Australia are kidding themselves. We need Wireless but we also new Fibre to the Home.
    youbeuty25
  • We will sit watching the sun rise. Our wireless device at hand. At home we will connect to the internet using wireless via NBN fibre. You see it a mixed up world and we should all stop bickering and spread the love!
    Blank Look