G9 closer to fibre network than Telstra

G9 closer to fibre network than Telstra

Summary: Telstra's rivals now have a "more developed" proposal for a national fibre broadband network than the giant telco has ever had, according to the national competition regulator.

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Telstra's rivals now have a "more developed" proposal for a national fibre broadband network than the giant telco has ever had, according to the national competition regulator.

The group of telcos known as the G9 -- Optus, Telecom New Zealand (AAPT/PowerTel), iiNet, Macquarie Telecom, Internode, Primus, Soul and TransACT -- initially detailed their proposal some 10 months ago, and are still putting the finishing touches on the plan.

"I think it's fair to say the G9 appear to have a more developed proposal than we ever saw from Telstra," Australian Competition and Consumer Commission chairman Graeme Samuel told a telecommunications user group conference in Sydney this morning. Telstra cancelled its own talks over a new national fibre network with the ACCC in August last year.

Samuel said the G9 members had been providing information to the ACCC on their infrastructure model, financial and proposed telco access arrangements to the network once it was built. The group is preparing to lodge a formal proposal -- known as a special access undertaking -- with the ACCC to detail those terms in the second quarter of this year.

Although Telstra has backed away from further discussion about its own proposal, Samuel said he would "always welcome" a resumption of talks with the telco.

"It is certainly in the interests of all Australians to have some competitive tension between the parties looking at rolling out fibre to the node," said Samuel.

The ACCC boss said in any discussions about a fibre rollout, the regulator would ensure that several fundamental principles applied.

Firstly, transparency in the process would be crucial. "No deals will be done with any carrier behind closed doors," said Samuel. "All proposals must be put forward for public consultation at the appropriate time."

Secondly, network builders will need to strike a balance between the interests of potential access seekers (such as rival telcos), and investors' need for a rate of return commensurate with market risk.

And lastly, the ACCC would preserve the confidentiality of any discussions before a proposal is made public.

"This will maximise the competitive tension between parties, leading to the best outcome for end users," said Samuel.

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

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41 comments
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  • Telstra and G9.

    Can Mr Samuel be serious when he states that he would seriously consider the G9 proposal. Firstly the G9 would be a monopoly where competition to it would be banned. This is surely opposed to every principle espoused by the Howard Government and the ACCC. This is a childish, stupid bluff with the chance of finding an investor to risk their billions of dollars in a scheme bound to fail practically zero. Please Mr Howard get out of the way and let Telstra deliver high speed broadband to Australians for the sake of Australia's future.
    anonymous
  • Telstra & G9

    Even combined all the ISP's that make up G9 do not match the monopoly of Telstra. The only company holding back broadband in Australia is Telstra... They could release ADSL2 to many exchanges, they don't. They could of released FTTN they didn't. They claim that they will have to give up use of this technology to competitors yet they don't even seek a special access undertaking.
    anonymous
  • Telstra & G9

    Even combined all the ISP's that make up G9 do not match the monopoly of Telstra. The only company holding back broadband in Australia is Telstra... They could release ADSL2 to many exchanges, they don't. They could of released FTTN they didn't. They claim that they will have to give up use of this technology to competitors yet they don't even seek a special access undertaking.
    anonymous
  • Telstra and G9

    Hilarious. The entire point of Telstra's FTTN plan was so that they could re-monopolise access to the copper network. When they weren't allowed to do this, they scrapped the whole idea. Just as well, as it would have wiped out the millions of dollars of investments into DSLAMs that other ISPs had made. (Investments which, if they weren't made, would have left us at 1.5mbit max speed.)

    The entire point of the G9 plan is to equalise access to the copper network. All ISPs, regardless of whether they are the 800 pound gorilla (Telstra) to mid size ISPs building their own network (Internode, iiNet) to the tiny bottom of the market resellers (Dodo) will be able to access it for the same cost.

    If they weren't guaranteed a monopoly, who's to say that Telstra wouldn't come along and build a new network, and sell access to it at below cost (underwritten by the billions of dollars in the bank)? This would result in undercutting G9/Speedreach and sending them into financial trouble, then once they are gone, Telstra can raise their prices back up to their current overpriced rates.
    anonymous
  • Be honest Sydney

    By the way Sydney, it would be nice if you would be open about the fact that you are a Telstra shareholder and part of their astro-turfing group:

    http://www.nowwearetalking.com.au/Home/PageBlog.aspx?mid=293
    anonymous
  • Telstra and G9

    Charles G... please be advised that I am not a holder of Telstra shares, am a retired person not employed or provisioned by Telstra in any way. Your argument must be very weak when you resort to personal attacks on any person who does not agree with your point of view. I would simply ask again, how could the Federal Government or the ACCC condone or support a plan to establish a business, as proposed by the G9, that would make that business a cartel and monopoly with Government regulation to ban any competition to it. I was under the impression that this situation was exactly what Mr Howard and Mr Samuel were trying to oppose. It is true that I have established a group of people who are interested in Telstra, mainly the 1,600,000 shareholders, the 45,000 Telstra employees, the millions of Australians with an investment in Telstra via their superannuation and of course every man, woman and child in Australia who own the billions of dollars in Telstra shares held for them in the Future Fund. I am a fifth generation Australian and have no hesitation to back and support a great Australian company when it is under threat from foreign owned opponents. Much the same as the support Qantas is getting from the Howard Government at the moment I suppose.
    anonymous
  • Page on NWAT

    If you aren't a Telstra shareholder, you may wish to get this page corrected - http://www.nowwearetalking.com.au/Home/PageBlog.aspx?mid=293 - which claims that you are: "In for the long haul, Syd has been a Telstra shareholder since the first T1 float in 1997, and maintains a long-term and loyal interest in the company."
    anonymous
  • Monopoly FTTN

    I agree that the G9 proposal is a monopoly. The advantage of this monopoly is that it's not mixing monopoly & competitive practices - so there'll be no confusion as to whether the wholesale price is fair.

    However - it is still a monopoly. We need to minimise that as much as possible. As such, I can only hope that the G9 starts by building in areas with the slowest broadband, including buying out Telstra's existing RIMs at fair value.

    I know the proposal is to leave the 1.5km around each exchange to the existing ADSL2+ competitive system - is it possible to make that further out (2km?) for the first couple of years, then add the closer nodes?

    ps. I also believe that in some areas Telstra will use its cable network, with DOCSIS3 speeds, as a competitor to the G9. What effect will that have on the networks returns etc?
    anonymous
  • PWNED!

    LOL....nice one mate! :-)

    In regards to the story; if the G9 want to bring fast broadband onto the market why should we want to stop them? It will only benefit all Australians in the long term, and it might make Telstra sit up and realise they should stop having a tantrum in the corner and get back to business.

    People complain about the international interests of the G9, but i think you'll find that up to 35% of Telstra shares can be foreign owned. Telstra used to be the big Australian, but now it is part owned AND run by internationals.
    anonymous
  • 1.5km limit

    I believe the 1.5km limit was a feature of the Telstra FTTN but I'm not sure if it is relevant to this one - not 100% on this though. Under the Telstra plan, households more than 1.5km from the exchange would be served by cabinets (or nodes, the N in FTTN) similar to RIM cabinets, whereas ones closer than 1.5km would be served by the exchange as it is now.

    As far as I know the Telstra cable network will be unaffected - although if they do join up with the G9 to build the network it could become apart of it, as all existing G9 members will be offering up their existing infrastructure as part of the network - for example, TransACT's cable network in Canberra.
    anonymous
  • Ban All Competition.

    Matt... I notice that you make no mention of the request by G9 that the Government legislate to ban competition to the G9 cartel.
    anonymous
  • Duplication

    You either get Telstra to build the network or G9. You do not want to duplicate like what happened to cable. I favour the G9 consortium because they are going to let anyone use the network at the same price. Telstra wants to lock everyone out of their FTN network.
    Or it becomes a national project and the Federal government builds it like they do with national roads.
    anonymous
  • Uh huh

    Even if that were true, how does it differ from what Telstra proposed with their own FTTN?

    You should stop regurgitating the propaganda and untruths force fed to you via Telstras spin doctors and look at the hard facts. The G9 have proposed a next generation fibre network which will benefit the telecoms sector (and consumers) for years to come, yet all telstra is interested in is how to increase profits (and keep the competition out).

    When it comes down to it would you rather:

    a) A single company running the show with no competition.

    or

    b) A group of nine companies controlling a single network, yet individually competing for customers like any normal healthy market should.

    It's not rocket science.
    anonymous
  • Telstra and G9

    Syd, lets get some facts strraight.

    1) It would appear you are a staright out liar and in fact a Telstra shareholder.

    2) It is unfortunate that Telstra is misleading people in the general public to do their campaigning for them. As someone who works in the industry, it is very simple to see through the barrage of half truths and straight out deceptions and lies that Telstra releases to the public. On the face value, often what Telstra says appears true or believable if you don't have experience in the industry. Obviously you are an intelligent, enthusiastic and passionate person, I only hope you can look into these lies perpetuated by Telstra and focus your energies onto something that is actually honest and constructive.

    Most of the companies you mention as being Foreign owned in fact are not, such as iiNet, Soul, Internode, and more, and many are listed on the ASX and available for you to invest in.

    Please consider the brilliant work that is being done by these companies, which is the only thing which keeps Telstra upgrading any facilities or services. There would be no ADSL2+ Broadband in Australia without these small Australian companies, and the significant investments they are making. Ultimately, Telstra still is not providing ADSL2+ to its 2000+ enabled exchanges due to its own stubborness.

    Regards
    anonymous
  • "Cartel"?

    I have to love the newspeak that Telstra is coming up with. Is using the word "cartel" one of the suggestions in the Telstra Shareholder's "Astroturfing for Dummies" book?

    A cartel uses methods such as "price fixing, limiting supply, or other restrictive practices". The G9 is going to open up access to broadband to all companies equally - something which is not happening now, as Telstra gives priority to its Bigpond arm over other ISPs.
    anonymous
  • Competition.

    Anon... I would have expected that with your fervent beliefs you would be prepared to have your identity published. As I have previously stated I do not own any Telstra shares. However this is besides the point and would you be so kind as to answer this question. Your statement that Telstra is a monopoly is quite wrong and I wonder, considering the number of Telcos in the business, how you can justify this assertion. Telstra wants and welcomes competition it just is hesitant to subsidise and assist it's opponents. It would appear that you are the one that is fearful of competition and expect the ACCC to be your saviour and defender. Best wishes to you in your endeavours and let the customer decide who survives in the Industry.
    anonymous
  • Competition

    You say "Telstra is a monopoly is quite wrong and I wonder, considering the number of Telcos in the business, how you can justify this assertion."

    Telstra has a monopoly over the CAN (copper network / customer access network).

    For 95% of these ISPs, Telstra gets minimum $45 a month from every customer. (minimum $20 line rental, minimum $25 DSLAM port fee, and maybe more that I can't think of off the top of my head).

    And for the few ISPs who have customers on their own DSLAM ports, Telstra gets at least $28 a month per customer ($20 line rental and the line access fee - I'm not sure what it is, but $8 is conservative. In addition to this, there are site costs for DSLAM space (rack space, air conditioning, etc) which must be paid to Telstra.

    Telstra could have 0% retail market share and still be making a huge profit from broadband. What incentive does it have to compete on retail value or quality of service? None, so it offers as little as it can for as much as it can.
    anonymous
  • A Great Company!

    Well Sydney, your wires are truly crossed if you think Telstra is a great company. Once upon a time it was, in the days when they pumped resources into R & D & collected the dividends from almost every telecommunications company in the world. But to call this toilet of a company that malingers on every step, that does turnarounds at every bend, cheats customers when being checked by ACCC by putting up temporary towers in the country then pulling them down when they're gone & grizzling constantly about a system that was laid in place before they became a non-Gov't institution & was a part of the reality. Remember something, everything Telstra has, Telstra got because it was a monopoly & all of it belonged to us, the people of Australia. When Mr Howard screwed us all by selling Telstra as if it wasn't ours, the basis of Telstra's industry was already there. They had to do little. Now, run by another American CEO who devastated 2 companies before coming here to do the same thing with Telstra & openly admits he couldn't give a stuff about service, rather the shareholders; I tell you this is un-Australian. We give a damn about the poor bastards who need our help but this Yankie Doodle cares about business. Fullstop!

    To call this company a great company - yeah right! I call them scum!
    anonymous
  • anyone with more power will exploit it

    You know this could of been solved if the underground communication cables or/and where they where laid remained the property of the Australian public and sold Telstra without them (if it is true about Telstra owning these things and/or rights). And any one who accessed these lines to provide a service had to pay their equal share to maintain them(Be it by the amount of users using them). But we all know Telstra would not have proberly sold so well even if they wanted to in the first place. And i doubt that not duplicating the lines is going to solve the problem just as duplicating is going to solve it.

    And deregulation is only good if there is more non co-operative competitive competition that is not a stalemate competitive environment. And dose not have to pay their competition to use the only lines (in this case) that supplies the services that they want to supply at their prices which makes everyones else plans more expensive than there own. We deregulated the banks to open a more competitive environment even if its not the same subject look how that became more competitive and cheaper and it is not the only thing we deregulated.

    I have a feeling (as again if this is true ) that if Telstra even got an unregulated competition environment as long as they gave up any/its ownership of the underground communication cables or/and where they where laid so no competition can go against them except where they use Telstra's own lines where they can charge their line fees

    Like where i am now at least 30-33 km away from Sydney CBD and the only viable cheapest - fastest - high data allowance plan is only on a certain "Big" telcos cable. Which the plan i am on is the only capped one offered by this isp in the first place and some of the competitors that can not go down this street at the same rate of speed as cable line though adsl that could be offering 0.5-6 times as much data and proberly the ones closer to the exchange getting equivalent speeds if not more. And could be getting it at the same price and also not having uploaded data added to the cap for usage like mine has.


    and by the way i thought the G9 is only called the G9 because the other 8 telcos hope Telstra will be one of them?
    anonymous
  • correction

    I have a feeling (as again if this is true ) that if Telstra even got an unregulated competition environment as long as they gave up any/its ownership of the underground communication cables or/and where they where laid - they will be unwilling to do so -so no competition can go against them except where they use Telstra's own lines where they can charge their line fees
    anonymous