NBN cash should be for DSLAMs too: ISPs

NBN cash should be for DSLAMs too: ISPs

Summary: Internode, iiNet and Adam Internet believe that if Telstra is being paid to decommission its copper network for the National Broadband Network roll-out, other internet service providers should also be compensated as their own infrastructure becomes obsolete.


Internode, iiNet and Adam Internet believe that if Telstra is being paid to decommission its copper network for the National Broadband Network (NBN) roll-out, other internet service providers (ISPs) should also be compensated as their own infrastructure becomes obsolete.

Telstra is currently waiting on the Australian Competition and Consumer Commission (ACCC)'s approval of its structural separation undertaking (SSU) and its shareholder vote on the $11 billion deal. If the company passes both of these checkpoints, as the NBN fibre is rolled out across Australia, Telstra will decommission its copper network and move its customers onto the NBN.

While Telstra will be compensated for customers that migrate onto the NBN, telcos that wholesale from Telstra will effectively be forced to move their own customers onto the NBN, and will receive no compensation for the copper-based technology they're using that will be rendered obsolete when the copper network is decommissioned. In a joint submission (PDF) to Telstra's structural separation undertaking on behalf of iiNet, Internode and Adam Internet, law firm Herbert Geer said that the ACCC should assess the advantage that this compensation offers the incumbent.

"Our clients believe that a fact that the ACCC should not overlook is that Telstra is being compensated by NBN Co to decommission its copper infrastructure, whereas NBN Co will not be compensating access seekers for their copper-based infrastructure (for example, DSLAMs) that the NBN will make obsolete," Herbert Geer said.

"As a matter of principle, this is obviously unfair to access seekers. The provision of this 'war chest' to an already dominant player in retail markets gives Telstra a significant competitive advantage over access seekers."

The deployment of DSLAM technology by Telstra's rivals in exchanges across the country has undoubtedly opened up Australia's ADSL2+ broadband market over the past few years. In areas where DSLAMs have not been deployed, such as in regional and rural Australia, iiNet and Internode have previously complained that Telstra has been able to sell retail broadband at prices lower than the wholesale products offered to its competitors.

Herbert Geer also addressed this point in its submission, stating that the SSU would "cement" wholesale prices in regional and rural areas at levels that would mean rival ISPs would be unable to compete with Telstra's retail prices.

"It is our clients' view that Telstra's conduct has caused, and continues to cause, serious anti-competitive effects in regional and rural markets for broadband services," Herbert Geer said.

The SSU wouldn't prevent the ISPs from seeking the ACCC to push further regulation on Telstra in the interim 10-year period as the NBN rolls out, Herbert Geer noted, but it would make it more difficult.

"Though acceptance of the SSU does not necessarily prevent other regulatory action, it would suggest that the ACCC considers the SSU would provide an acceptable level of competition in all geographic fixed-broadband markets."

In the meantime, iiNet has committed to driving down its costs in regional Australia by deploying DSLAMs in places where the company can make back its investment in less than two years. The average cost to deploy a DSLAM is approximately $100,000 for the company. It has estimated that when it has moved all of its customers onto the NBN, it will save approximately 27 per cent in costs per customer.

Topics: NBN, Broadband, Telcos, Telstra


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.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • I can understand the logic but the compensation cash should really come from Telstra not NBNco.
    Hubert Cumberdale
    • You raise a good point. Would that be the trickle down effect of the NBN deal?
      Josh Taylor
      • I cant imagine Telstra share holders being too happy about it though ;-)
        Hubert Cumberdale
  • I would like to know how this will work?

    And why should NBNCo pay twice, Three times, Four times (Competitive DSLAM's) on the same network?)

    How will this work?
    How will this effect the NBN in the long run?
    How will this effect the NBN in the short term?

    There are many questionable questions that need to be asked, including as to, why?

    The reason ISP's invested in DSLAM's is to make more money from Telstra.
    We are now moving away from Telstra, and ISP's will make money off NBN, so why should they our tax dollars? if we are paying the infrastructure OWNER of the copper network ?

    And guess what, another law firm, is in the mix and now will get the money off ISPs, so guess who will be the winner at the end of the day without loosing anything?

    There is a fundamental difference between the deal between Telstra and NBNCo.
  • My router will be obselete when the NBN comes along. They should pay me for that! Seriously, where does the sticking your hand out to NBN Co (The govt) end? ISPs have said they are still going to continue to roll out DSLAMs in the next few years even though they know the NBN is coming, because the payoff period for a DSLAM is relatively short, and the DSLAM will have paid for itself before the NBN arrives. This being the case, and the fact that many of the DSLAMs in this ambit claim have been in for years and will have paid for themselves many times over, its a bit rich to say they should be compensated. It should be said here that I hold the same view about Telstra and feel they got paid far too much because of this fact, and also because the taxpayer already paid to install much of the copper, pits and ductwork over the decades it was installed. Telstra are still pulling the strings though, and the consumer and the taxpayer loses everytime they have control.
  • I bought an ADSL modem and a phone - I too should be compensated.

    Telstra are being paid to transfer all it's customers (wholesale and retail) to the new network - they are not paying for stranded assets.
  • Why should iinet ,intwrnode and adam be compensated, they werent under the same rules as telstra, they were getting all the advanatges
    Sydney L-b3d5d
    • let's not get too excited syd, the many $b's telstra made from the pstn, dwarfs the "advantages" access seekers made.

      but as telstra was sold ('after they were vested the pstn') they legally need to be compensated, imo.
  • so these are examples of the wonderfully thoughtful, non greedy, private companies that will look after us all, when the opposition ideologues hand our nations comms over to them?

    patience boys...

    if the coalition get into power, they will be throwing taxpayer dollars at you to build and own our nbn.
  • Telstra are not being paid to decommission their DSLAMs, they are being paid to decommission their copper access network. If anyone else has a copper network I agree they should entitled to compensation. Oh that's right, that's nobody else. Telstra have to wear the cost of writing off their DSLAMs, so should everyone else.
  • Is someone going to compensate me for my obsolete ADSL2+ modem?
    • Good point with the ADSL2+ modems. Perhaps we can get these whiny ISPs to compensate us for our stranded modems. It's only fair.
      Hubert Cumberdale
  • This does strike me as a poorly thought out money grab by the other ISP's. I agree with caspian, above. The Telstra deal is for the migration away from the copper network, and has nothing to do with the DSLAMs that sit at the end of it.

    As has been pointed out, Telstra will receive $0 for its now-obsolete DSLAMs, as will other ISP's, and this is exactly fair.
  • Here we go again the snouts are in the trough and the king size bludge and grope for cash is on. Look folks the sneaky parasitical ride on Telstra is finished. Telstra is being broken up and Telstra Wholesale will no longer exist. You called for open and fair competition and now you have it. So gear up for customer assisting dynamic competition and shape up, stand on your own feet or ship out.
  • i tend to agree with your first sentence syd.

    the only difference between you and i therefore seems to be, that i can clearly see them all for the money grabbing b^stards they are (which is one reason i embrace the nbn). whereas you have this fairytale belief, brought on by your own share driven agenda, that... the sun shines from the telstra bum, while the rest are scum (yes that rhymes and a slogan i'm sure sol and phil would be proud of).

    but with you being a tls shareholder, that would make you a disparaging opponent out for his own financial benefit, to use your very own well worn analogy, wouldn't it?
  • lol Beta very good. But in the name of God instead of all the superfluous argument let's just get the NBN built.
    • err, that's what is happening.
  • sounds fair to me
  • Compensation based on infrastructure for these ISPs is ridiculous. The DSLAMs are an investment and also claimed as depreciating assets. The racks that the DSLAMs are installed in, switches and transmission equipment can also be reused in the POIs or data centers anyway. As others have stated we are not going to be compensated for the cost of purchasing new equipment when we are forced to use the NBN so why should they.

    On the other hand I do believe that they are entitled to be compensated for the cost in decommissioning this equipment from the Telstra exchanges as the equipment will become obsolete the moment the copper infrastructure is removed.
  • The DSLAM's could simply be relocated to areas not yet serviced by the NBN to improve unserviced areas.
    Kevin Cobley