Tasmanians a step closer to backhaul competition?

Tasmanians a step closer to backhaul competition?

Summary: Basslink Telecoms has received a carrier licence from the Australian Communications and Media Authority (ACMA), and says its fibre-optic cable could be operational by the end of this year, but consumer action group Digital Tasmania is sceptical.


Basslink Telecoms has received a carrier licence from the Australian Communications and Media Authority (ACMA), and says its fibre-optic cable under the Bass Strait could be operational by the end of this year, but consumer action group Digital Tasmania is sceptical.

According to a spokesperson from Basslink Telecoms, the final step before the cable can start carrying data is the completion of negotiations between the Tasmanian government and Aurora — the company selected to commercialise the state's AU$30 million fibre-optic backbone.

Basslink Telecoms said it is optimistic of being able to reach an agreement before the end of the year.

Consumer action group Digital Tasmania, which has been set up to "get Basslink going" has announced its approval of Basslink Telecom's securing the licence, but is sceptical the cable will be operational in the time stated.

"We've been told this sort of time frame before," a spokesperson said. "It's a good step forward but there's nothing concrete," he continued.

When Basslink becomes operational, there will be three cables connecting Tasmania to the mainland, but the other two are operated by Telstra, which has raised questions of uncompetitive backhaul pricing.

Digital Tasmania is concerned that even when the new cable is lit up, competitive pricing may not result, with the possibility of a "cosy duopoly" forming.

It's easy for prices to stay high in a two-carrier environment, the spokesperson said: "Basslink hasn't given any guarantee that they are going to compete."

Digital Australia would like Basslink to show some sort of commitment to competitive pricing, the spokesperson said, adding that the region needed Basslink to be truly competitive, not "just pricing 10 percent lower than Telstra".

Basslink Telecoms feels that they have addressed this in their announcement, according to the spokesperson: "We understand and embrace the Government's target of achieving genuine price competition for broadband services in Tasmania and remain confident this can be delivered."

Tasmania-Melbourne backhaul is a regulated service according to the ACCC, and will remain so when Basslink goes live. "People would remain able to seek an arbitrated price from anyone offering transmission on the route," a spokesperson said.

Obtaining a carrier licence is a quick process with a low application fee of AU$2,200, Robert Johnston, ACMA manager telecommunication licensing and numbering section told ZDNet.com.au. Ongoing fees are graduated depending on revenues.

The Tasmanian government did not respond to request for comment in time for publication.

Topics: Broadband, Government, Government AU, NBN

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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  • Vic-Tas backhaul regulated!

    Thanks again Suzanne for yet another "unbiased and untainted" article.

    It has become all too common for some lesser journos to use sensationalism (normally at Telstra's expense) in a vain attempt to up the ratings, so to speak. So kudos to you.

    I found your 3rd last paragraph (see copy/paste below) of particular interest, following a stoush herein on the 5/5, between Stephen Smith and James Bell, where Mr. Smith stated that the Vic-Tas backhaul is regulated by the ACCC and Mr. Bell vehemently refuted this.

    Seems Mr. Smith was right and Mr. Bell wrong, according to this info!

    From the above article: "Tasmania-Melbourne backhaul is a regulated service according to the ACCC, and will remain so when Basslink goes live. "People would remain able to seek an arbitrated price from anyone offering transmission on the route," a spokesperson said.

    I personally do not know, so unless the spokesman is wrong (and there will be no doubt about it in some peoples eyes) - seems pretty cut and dried. The claimed high price of backhaul (by Internode) is regulated by the ACCC and Internode are able to "seek an arbitrated price".

    As such, this clearly gives demonstrates, as mentioned by some at the time, that this was nothing more than a cheap PR stunt, by Internode.
  • Regulation issue

    As I replied to a similar comment of your's on the Mercury article, I'll copy and paste it here: The ACCC can't do anything unless a customer (ISP) makes a claim against Telstra. Some did last year, but the ACCC didn't have a pricing model which could be used. The do now (since March this year) so a customer (ISP) could do it now - but doing it now could delay Basslink even more. Once Basslink is up and going and if prices are still unacceptable, then would be the appropriate time to make a claim.
  • Proves it was nothing more than a cheap stunt!

    Charles I'll do likewise.

    So what you're saying is, whilst Cityspring (sibling of Optus) had/have the Basslink cable lying dormant returning $2m p.a. competitors typically made an application to the ACCC to gain regulated access to Telstra's cable! However the ACCC, due to their own incompetence, rejected these claims as they "didn't have a pricing model"? But, now that the ACCC have this magical pricing formula, all competitors have now decided they don't wish to use the formula after all? So let's blame Telstra - lol!

    Another theory could be that perhaps no one wants to use the new pricing formula, simply because it demonstrates Telstra's current pricings to be contrary to Internodes claims?

    (Here's an extra not from the original). If they did apply to the ACCC and found Telstra's pricings to fit within the formula, their total Telstra negative argument would then be shot down, wouldn't it? So again this is perhaps why they have decided that it's best not to apply after all.

    If the info you supplied is in fact correct, Internode would have known all of this! But still threw a well publicised tantrum, aimed only at Telstra? In other words, let's revert to our normal position of simply blaming Telstra for everything- brilliant!

    My friend, if anything, this info proves beyond any doubt, "that this was/is nothing more than a cheap and sneaky stunt. Again I reiterate, Internode (and others) are obviously playing games, at Telstra's expense"!
  • Hmm, nevermind

    Nevermind, I see by your statements you're just another Telstra astroturfer and not being serious.

    (BTW, the "magical formula" shows a 155Mbps link should cost around $318k pa. Telstra currently charges $2M pa.)

    You, know there is reason that other companies "blame Telstra for everything" - it's not a co-incidence.

    Yes thank you Charlie.

    I gave you the benefit of the doubt, even though your claims were contrary to the ACCC spokesperson. So never again!

    So for your benefit, let's revisit what those who "actually know (i.e. the spokesperson)" has said and is outlined in the above article -

    "Tasmania-Melbourne backhaul IS A REGULATED service according to the ACCC, and WILL REMAIN SO when Basslink goes live. "People would REMAIN ABLE to seek an arbitrated price from anyone offering transmission on the route," a spokesperson said. All very obvious to everyone (but one) - lol!

    As such, you then choose to personally attack me (an astroturfer who isn't serious - lol), with lies and BS - wake up.

    So what's good for the goose. Ergo, as such it would appear to me that you are obvioulsy an anti-Telstra crusader who is so biased, overcome with tall poppy syndrome and jealous of Telstra, that you will argue that black is white until you are blue in the face - LMFAO.
  • Lets start again..

    What of those words you put in capitals isn't explained by this part of my first reply: "a customer (ISP) could do it now - but doing it now could delay Basslink even more. Once Basslink is up and going and if prices are still unacceptable, then would be the appropriate time to make a claim."

    People who inexplicably support Telstra (to the extreme - using phrases that show extreme bias, like you did) are often thought of as being astroturfers. One reason being that Telstra specifically encouraged its shareholders and customers to do this with its BAC campaign over the past couple of years. The other reason is that there seems to be absolutely no reason to support anything Telstra does other than having a financial interest. If you have another reason for supporting a company that was handed a ready made national communications network including 100% customer base, and then proceeded to do everything in its might to hold the industry back, then I'd like to know. (Xenophobia is not a reason, by the way).

    I'm not jealous of Telstra. I'm embarrassed when other nations see the state of our industry. I hate to see what it will be like in another 10 years if Telstra wins the NBN.

    To get this back on topic: Look at how Telstra's prices are affected by the presence of competition. Bass Strait is one example. ADSL pre competition is another ($90 for 3gb of data at 512k speeds). And if the NBN falls into their hands ... don't expect prices to go down.
  • You may want to start again ... again

    What a joke.

    When the industry was regulated it was a major goal of the government and the Telstra management to reduce their market share as quickly as possible to encourage competition. What happened was lots of companies gained carrier licenses and started to resell Telstra services but failed to invest into building their own networks. There has been more money invested in mobile networks by the major (non-Telstra) mobile carriers then all of the fixed infrastructure investment by non-Telstra companies since deregulation. This is all about profits and nothing else.

    Telstra has already committed to building the NBN network within a set time frame. If we look at the likes of Optus we can see that the do a lot of talking but very little actual building. We can see what Optus has done with their 3G mobile network (they are 2 years behind Telstra's Next G), we look at the Tasmanian fiber link ($2M per year from the Tas Govt and no working service), we look at Opel (8 months with no work done only to have their bluff called by the Labor Govt).

    Across the globe telecommunications prices have declined, people like to pull prices from years ago and say "if it was up to Telstra they would still be the high". The simple reality is that prices are bottoming out, what is starting to happen is companies are offering more for the same price. Many companies set budgets to reduce telco costs by a percentage each year, what most are finding now is their costs are not reducing as much as they expect and in coming years the costs will actually start to increase.

    Australian prices have declined more in real terms then almost any other country on the world, some of this is Technology related and some is competition related.

    If I was running Telstra I would keep prices as high as I could for three reasons. (1) Short term profits while there is no significant competition, (2) to encourage investment by competitors so they have to take the risks with their own money instead of reselling Telstra services and (3) to avoid being called anti competitive by selling services too low to allow competitors to build their own networks and make a profit.

    Until the other major companies actually invest some of their own money into the country, until they have their own service staff repairing faults and until they have no one else to blame other then themselves Telstra will always be there as the easy target to distract people from the real problems in this industry.
  • It really is time.

    While being reluctant to enter a debate with such well versed correspondents and being a believer in the old saying "When elephants fight keep out of the way" I do think that we see a debate that is caused, in the main, by businesses whose livelihood is threatened by the application of competitive but fair business principles.

    For years the bludge on Telstra trick has worked well for Telstra opponents, to the detriment of Telstra, and the competition charade has been used to full advantage. But now with the reduction of bottle-necks it is time for Telstra opponents to invest in their own infrastructure and forget the freeload on Telstra.

    One serious question. What if G? were to win the NBN tender and proceeded with the roll-out and then Telstra, in the spirit of competition, decided to build a fibre to the node to connect to Telstra's copper. Would G? welcome this competition as one would expect if their competition argument is genuine. Or do they as has been rumoured want competition banned? About time these tricksters were exposed and free and open competition allowed in Australia.
  • Not published?

    FYI Charles - my reply to you didn't appear in the Mercury and I posted it before here? Curious!

    Conspiracy theory like some (JB, Mattinoz etc)claim when their grounbreaking comments aren't published on NWAT?

    Na, ***t happens!
  • Competition / duplication

    I don't know Sydney, it would seem rather pointless seeing as Telstra (as a retailer) would be able to purchase services from the FTTN entity at the exact same cost as Optus, iiNet, TPG or Dodo. We have heard over the past couple of years that Telstra is against duplication, so if they did so they would be seen as hypocrites.
  • Mercury

    SJT, yeah the Mercury comments are moderated so don't appear for a while after posting. They are a bit slack like that. Sometimes after a few days they don't even bother.
  • re Competition / duplication

    Would that also apply to the G9 as they would be owned by 9 companies and as such would make their pricing cheaper then anyone else that may wish to buy services?
  • Competition or not?

    Charles it may seem rather pointless to you but perhaps not to Telstra who may wish to supply true competition to G9. My question remains. What would the position of the competition craving ACCC and Telstra opponents be if Telstra did decide to install their own FTTN in the unlikely happening that G9 did win the NBN tender???? On the other hand if Telstra were to win the NBN tender I feel sure they would have no objection to a roll-out challenge by G9.
  • re Competition / duplication

    Anonymous: I'm not sure why you assume that every company out there would behave the same as Telstra. Statements from the G9 have intentionally stated that the company would be separate from any of it's respective members, and would sell to anyone at the same price, hence my example above including Dodo (as a random non-Telstra, non-G9 ISP)
  • re Competition or not?

    But when (at present) another company supplies "true competition" to Telstra, in terms of their own DSLAMs or alternative backhaul for example, Telstra trots out the "duplication" line. My question is how is this any different?
  • And again....

    Heloooo, Charles. Please throw away the broken record!

    During every forum, blog etc, you ask the very same question and it is answered for you!

    In vain obviously! Because within days you (dare I say) "duplicate" the exact same question again - go figure?

    So if you don't really want to know or simply can't handle the truth, why keep asking? The answer is the same now as it was when you asked before and before that and...

    But for now, here goes AGAIN.

    The duplication comments were in relation to hOPELess. Where government money was meant for underserviced areas but was sneakily going to be used to duplicate! However, Sen. Conroy refused to be taken, like the previous desperate government!

    It's quite simple! True competition (not the regulated, spongy type you love) is most WELCOMED! After all, we all want better value in everything we purcahse don't we?

    So in relation to "true competition" and the obvious benefits thereof - here's an interesting quote from Chris Berg (research fellow with Public Affairs) yesterday 19/5. -

    "Compared with the lumbering environment of rent seeking created by the regulations that apply to our fixed-line network, Australia's mobile networks are a paradise of laissez-faire entrepreneurship. In the mobile sphere, there is the rapid innovation and the large-scale investment federal governments have long desired".

    Well what do you know!

    The full story is here - http://www.theaustralian.news.com.au/story/0,25197,23718830-7583,00.html

    Now how about you answer Mr. Lawrence's question instead of hiding behind your same old diversion?