Telstra Wholesale bows out of Broadband Connect

Telstra Wholesale bows out of Broadband Connect

Summary: Telstra will not participate as a wholesale provider in the federal government's new AU$878 million subsidised rural broadband scheme, leaving a number of smaller ISPs unable to provide new government-subsidised broadband to the bush without building their own infrastructure. Broadband Connect (BC) is a federal government scheme that commenced on 1 January.

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TOPICS: Telcos, Telstra
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Telstra will not participate as a wholesale provider in the federal government's new AU$878 million subsidised rural broadband scheme, leaving a number of smaller ISPs unable to provide new government-subsidised broadband to the bush without building their own infrastructure.

Broadband Connect (BC) is a federal government scheme that commenced on 1 January. It will see Internet service providers given incentives to supply broadband to the bush at similar prices to metropolitan areas, and replaces the AU$157 million Higher Bandwidth Incentive Scheme (HiBIS), which Telstra's wholesale and retail arms had participated in.

"Telstra has decided not to register as a wholesale provider under the Broadband Connect scheme," a letter from the giant to a smaller ISP, seen by ZDNet Australia, reads.

"This letter is to notify you that, while Telstra will still supply DSL services in accordance with your DSL agreement, Telstra will not be providing you with any new HiBIS-eligible services from 11 January 2006 and will not be offering wholesale Broadband Connect services."

"However, Telstra will continue to honour its commitments under the HiBIS agreement in respect of existing HiBIS-eligible services."

A Telstra spokesperson said he was unaware of any such communication or whether Telstra had made a decision on whether to participate in Broadband Connect on any level.

ZDNet Australia understands a similar letter was sent to Perth-based broadband seller Westnet early in January.

Telstra's decision will lock a number of ISPs out of getting access to the Broadband Connect funds unless they build their own regional infrastructure or gain access to alternative wholesale services.

The decision has had an immediate effect, with one of the nation's largest ISPs, Internode, stating on its Web site that it will be unable to provide government-subsidised broadband services in areas where it does not own its own infrastructure.

"We will be unable to continue to make our 'HiBIS' offers for services connected after January 11th 2006 except where the service is delivered on broadband infrastructure created by our partner company, Agile," the site states.

"This effectively limits our ongoing offers under this scheme to Agile DSLAM and wireless DSL coverage areas outside of metropolitan areas."

A DSLAM, or DSL Multiplexer, is a piece of ADSL hardware which sits in Telstra's telephone exchanges and provides ADSL services to customers.

Topics: Telcos, Telstra

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7 comments
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  • Telstra and Sol

    Today we see Sol and his mercenries bringing American hard-nose protectionism into communications industry .Surely limiting broadband to the bush will inhibit growth and employment opportunities
    theblindman-01a8b
  • Telstra

    Maybe the Govt should use its 51% while it still has it, to issue a Board directive on this matter. Or is Telstra just creating a bargaining chip for negotiations on other matters...
    anonymous
  • telstra lack of BC participation

    Nah

    its just telstra displaying its new competition motto - if you can't beat them then shut them down by not playing
    anonymous
  • Watch the bleating begin

    Surely the subsidy is intended to stimulate network rollout? These parasiting resellers need to get off their backsides and get their own infastructure in place. As a Telstra shareholder I've had enough of funding these whingers.
    anonymous
  • US Holiday

    Sol and his amigo mates + some of the locals like Justin Mile etc are all off galavanting around the US visiting http://www.cesweb.org/ and the like. Meanwhile the share price is under $4 and the staff are all wondering what the hell is going on, if they have jobs etc.
    anonymous
  • Telstra BC

    My local regional ISP provides a wireless service under HIBIS. They have all their own broadcast points, servers and other infrastructure, except....
    in order to get into the 'Net itself, they are forced to use the Telstra backbone. So don't go on about these smaller guys not doing anything for themselves - all they need is a physical entry point into the Internet, which is all that they are using Telstra for. They have to provide everything else themselves.
    robert26-b9fe5
  • Remember where Telstra's network came from

    On a level playing field without any existing infrastructure that would be a fair comment, however Telstra has not exactly spent billions building the nationwide network - they inherited it from the PMG/Telecom.
    The problem stems from the way in which the telecoms market has been de-regulated and privatised. The basic provision of bits (whether over copper or fibre) is analogous the delivery of electrons in the de-regulated power market. No-one is suggesting that we should have 4 sets of power lines running down the street in order to "stimulate competition".
    Yet apparently telecommunications is different? Telstra complains that it is not economically viable to support rural services given the current pricing model, so how can it possibly make sense for other providers to deploy parallel networks if Telstra with its economies of scale.
    If the government is serious about encouraging competition in the telecommunications sector they need to examine ways to disconnect" the "roads" from the "traffic". The U.S. tried splitting the market into regional monopolies - a policy which effectively seems to have been undone by mergers and acquisitions. A more sensible approach seems would seem to be to recognise that the provision of the network (at least in regional and rural areas) is a natural monopoly and regulate it on that basis. These regulations would not preclude any telco (including Telstra) from deploying additional delivery systems (such as wireless or fibre) but would require that a base level of public infrastructure be maintained.
    anonymous