iiNet caves on Telstra South Brisbane fibre

iiNet caves on Telstra South Brisbane fibre

Summary: In a move that the company admits will provide some of its customers with an inferior service, iiNet has signed an agreement to transfer its customers onto Telstra's fibre network in South Brisbane.

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In a move that the company admits will provide some of its customers with an inferior service, iiNet has signed an agreement to transfer its customers onto Telstra's fibre network in South Brisbane.

Telstra opted to replace the copper network connecting around 18,000 premises in South Brisbane, because the South Brisbane telephone exchange is set to close to make way for the construction of the new Queensland Children's Hospital. In June, the telco began connecting its customers to the new fibre, and had begun discussions with its wholesale customers, such as iiNet, to move over.

Although customers can get services with download speeds of up to 100 megabits per second (Mbps) over the fibre, iiNet CEO Michael Malone had said last month that Telstra wasn't allowing retailers to offer services like IPTV, meaning that customers in the area would miss out on iiNet's FetchTV product.

However, after describing the situation as being like having a gun to its head, iiNet has now given in to Telstra's demands, with the company's chief regulatory officer Steve Dalby posting on broadband enthusiast forum Whirlpool yesterday that that company had reluctantly agreed to move customers.

"iiNet has now signed a fibre schedule after a lengthy and difficult process with the incumbent. Our new customer plans are being finalised, and we expect to commence the migration of our customers in the next few weeks," he said. "The agreement is unsatisfactory, and is signed with the knowledge that we have no choice, given Telstra's massive power and the option of 'sign before we cut your customers off.'"

Dalby pointed to Telstra's refusal to offer similar services to ISPs that they are currently able to provide over ADSL2+, such as IPTV, saying that the moved resulted in the ISPs having access to "a fibre network that won't cater for products currently being delivered on 50-year-old copper".

The executive added that the situation that iiNet was placed in by Telstra showed the need for structural separation of the company's wholesale and retail arms.

"This is a clear example as to why Telstra must never again be allowed to operate the national telecommunications infrastructure; it's why the ACCC must be hard-nosed about the structural separation undertaking, and why I will never recommend Telstra to anyone."

When queried as to whether iiNet could offer an alternative service to customers over wireless, Dalby said that it wouldn't be viable.

"Because we don't think that wireless will ever compete effectively with fixed-line for traffic capacity, reliability and cost," he said. "Wireless is great for individuals and mobility, but would I, could I, run my household or business over wireless? Nope."

Telstra plans to complete migrating customers to fibre by December 2012, when Telstra's exchange building will be knocked down to make way for the new hospital.

Topics: Telcos, Broadband, 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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14 comments
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  • Is Steve Dalby for real with his complaints about Telstra? Does he not know that in a competitive free enterprise world no free-loads or handouts can be expected from opponents. Actually, and honestly, he is experiencing exactly what Telstra has suffered for years, at the instigation of Telstra opponents, who have constantly called on Government to restrict and blackmail Telstra with outrageous demands of rules and regulation. With the level playing field demanded by Telstra opponents will come serious, fair and intense competition with the Australian consumer the winner, and all players had best get used to it.
    sydneyla
  • IINET could always install their own fibre? Yet they choose to let Telstra do the hard and expensive part and then go for the far cheaper access rental option. It annoys me that third party providers have their equipment in the Telstra exchange, use large parts of the Telstra network and then complain. In my opinion, once they have access, they then offer PayTV, IP telephony and so on, all the time syphoning business on multiple fronts away from Telstra. What if any viable private enterprise business would seriously allow that to happen?

    In my opinion, IINET may be No 2 on ADSL, but in the scheme of the true cost of telecommunications they are very small players. As hard as it seems to some, Telstra is protecting its shareholders (who parted with their hard earned life savings to buy those shares) , its products and services and ultimately the employees they pay.
    My Opinion-2c0fd
  • Wow, didn't take the two usual Telstra suspects long to sprout the old tired propoganda, Thodey must have slipped them a few incentives from his new $5m personal pot of corporate gold...
    btone-c5d11
  • @btone... Spot on!

    sydneyla & My Opinion, immediately done their rose tinted glasses whenever Telstra comes under attack.
    In addition to getting a handout from the pot of corporate gold, they have to defend their under performing shares. Even with total control over the network, which Telstra has, but their defender always ignore! the shares continue to perform...badly.

    It's going to get worse, guys, as soon as the NBN takes off.
    I'd off load your shares ASAP! 10% of zero is zero once the corporate pot is empty.
    Huntsman.ks
  • Keith don't take offence, but I will decline your financial advice on your past performance in all things financial and technical. It is an undeniable fact that Telstra has suffered the most vile domination and blackmail in Australia's business history to be forced from competition with the NBN, the object of which was to allow the NBN to become a monopoly with no competition allowed.

    Normally, this situation would bring tremendous protest from the ACCC, and in fact from others in the industry. The facts are that opponents of Telstra will, and do, use every devious and unfair trick in the book to gain and hold advantage for themselves. With the level playing field approaching they are fearful of open competition and we shall no doubt see more devilish schemes from them.

    Their next tricky tirade will be a call for the ACCC to restrict the amount of money Telstra can spend on advertising to advise Australian consumers of the advantage of Telstra services. It would not be out of character for Telstra opponents to demand a share of the money Telstra is to receive from the NBN Co simply because Telstra is so big and strong and opponents doubt their capacity to compete.

    Thankfully this objectionable period of free-load and parasitic application on Telstra is about to end and Australians can look forward to a great future when true, serious and intense competition will deliver superior products and services at the best possible price. Also it will allow the ACCC to let the RSP free to battle it out and for the ACCC to apply its total concentration on the NBN to ensure it does not abuse its monopoly position.
    sydneyla
  • Syd writes: (lol)
    "The facts are that opponents of Telstra will, and do, use every devious and unfair trick in the book to gain and hold advantage for themselves"

    Guess that's why Telstra Reps have phoned us almost weekly over the past 9 months offering us special inducements to "come back" & trying con us into signing for long-term contracts before the NBN arrives & levels the playing field?
    grump3
  • SO??????
    sydneyla
    • rofl.

      telstra get a freebie network and some loser shareholders think they are hard done by because telstra rent it out.

      oh nwat and the lies live on!
      Beta-9f71a
  • Beta you must be in an excellent financial situation if you consider the sixty thousand million dollars Aussie mums and dads paid for Telstra, as a "freebie".

    Please Beta come into the real world, abandon you childish untruthful rantings and after educating yourself of the facts post factual statements.
    sydneyla
  • Sydney, are you seriously suggesting that what Telstra is doing in south Brisbane is ethical and in the best interest of South Brisbane residents?
    They are essentially being asked to pay ancient and inflated fibre prices, for what is in many ways, an inferior service, all topped off with less quota!
    I get why Telstra is doing it, to protect their shares yadda yadda, but that doesn't make it right.
    Telstra is an inefficient and out of touch former public service that has clung to a monopoly as a way of staying competitive for far too long!
    Let it end, please!
    Bapo
  • Bapo I do not know enough of the technical details of the South Brisbane operation to comment but I do know that Telstra, being one of the greatest (if not the greatest) philanthropic company in Australia, would be most devoted to supply a service to customers at the cheapest price, having consideration to the fact that being a public company they are duty bound to make a profit for their Australian owners.
    sydneyla
  • Telcos are not becoming poor anytime soon. Does anyone really think that the government would have considered the new NBN if telstra would have upgraded their old copperwire network?. Telstra is getting serious competition, and there is nothing wrong with that. Also about the poor mothers and fathers that invested in telstra shares, when you invest in shares you know the risks, you win some you lose some, that is why it is called a high risk investment.
    normanf123
    • indeed normanf123.

      the thing that really galls the usual suspect tls shareholders here, who still live in nwat wonderland, is... they probably bought telstra and told everyone get on them, they 'are a monopoly' you can't lose.

      still bites deep i'll bet.
      Beta-9f71a
  • gee how did i miss this...?

    because shareholders paid doesn't change how telstra received the pstn, syd - something you always love to ignore.

    please syd come into the real world, abandon you childish, GREEDY, untruthful rantings and after educating yourself of the facts, post factual statements, instead of regurgitated, proven false (even telstra distance them self from) maniacal nwat idiocy.
    Beta-9f71a