Will Internode pull out of the bush?

Will Internode pull out of the bush?

Summary: Internode founder Simon Hackett warns that his company could soon stop selling in areas where they are reliant on Telstra's wholesale DSL product.


Internode founder Simon Hackett warns that his company could soon stop selling in areas where they are reliant on Telstra's wholesale DSL product.

"In a sense we're the last of the Mohicans," he says in this week's Twisted Wire, pointing to how some other players only provide service where they have their own DSLAMs in exchanges. He thinks the Australian Competition and Consumer Commission has taken its eye off the ball when it comes to controlling Telstra's wholesale pricing.

I ask Communications Minister Stephen Conroy whether he's concerned about the potential for companies to stop offering national coverage, before and after the arrival of the National Broadband Network. He says the new network will disrupt many parts of the industry, but in the short term the regulator needs to act, and the separation of Telstra needs to push ahead.

We also hear from Paul Brooks, owner of Layer 10 Advisory, who sides with Simon Hackett in opposing NBN Co's Connectivity Virtual Circuit pricing. We discuss how it's reminiscent of Telstra's response to an ACCC Competition Notice almost 10 years ago. And I contemplate whether it's another example of how it could benefit bigger players more than smaller ones.

As always we welcome your feedback. Call the Twisted Wire feedback line on 02 9304 5198 to leave your comments, to be featured in future programs.

Running Time: 28 minutes, 38 seconds

Topics: Government AU, Telcos


Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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  • Phil - Feeling like a stuck record. The whole artilce is done on the basis of fibre actually going to the bush. You refer to diggers going down the streets etc. If you look at Quiglies comments he is not providing service to towns of less than 1000 dwellings that fall within the footprint, and is not even going beyond the urban fringe of the narrow coastal fibre coverage area. If these people want they will be forced to pay extra over and above their taxes.

    Simons issues with DSLAM's will be moot - the understanding is that once NBN Co gets its wirelss in the bush going Telstra will shutdown its copper network.
    • @ Rossyduck ... wow first to comment here too now, whaddaguy!

      FYI - the current NBN from day 1, has always been... towns with a population greater than 1000, will get fibre - nothing has changed. So please...!

      Quigley is simply repeating what we all (well apart from one) already knew...!
    • FYI too Rossyduck... in relation to your last paragraph wireless/copper closure...

      ..."However, NBN Co said that the government policy under which it was operating had stipulated that the copper network should be maintained for a decade in areas not to be covered by the fibre footprint — 7 per cent of premises"...

  • Simon's point is not about the NBN - it's now. He argues it is not profitable supplying access where he is reliant on Telstra's wholesale DSL product. He cannot compete with their price and is likely to pull out of those areas.
  • It's always interesting to read that it is ok for ISP's including Internode not to enable exchanges with their own gear in low yield areas such as in regional and rural Australia because it is too expensive with low ROI and just cherry pick lucrative exchanges.
    It is also ok for the second largest Telco in Australia Optus to stop their DSLAM rollout at the end of 2009, their business case to continue the rollout out of the already enabled cherry picked areas doesn't stack up either.

    The shortfall is then by default is taken up Telstra, the business case doesn't stack up for Telstra competitors but they don't mind reselling Telstra Wholesale ADSL, LSS and ULL out of those areas, then complain it is too expensive!

    Well duh yeah, it is expensive for Telstra as well!

    Conroy always willing to push the political agenda puts the blame on structural separation of Telstra (how is that going to change anything?) and that the 'regulator needs to act', which means force Telstra to sell it cheaper.
  • Err, that's because advocate/alain... the others didn't receive a monopoly PSTN golden goose, did they? Telstra did, hence the onus is on them... it isn't hard to understand for those who wish to understand 9or those who ahev the capacity to understand)...!

    So tell us again... since the likes of Internode, Optus won't and Telstra shouldn't have to, just why we don't need an NBN and how private enterprise will race to build it for us...

    Contradiction #12, I'd say...! LOL
  • So we have Telstra Wholesale ready to offer an aggregator network for smaller players, in competition with Optus, AAPT, and others. So that pricing will be a combination of NBN charges plus a competitive rate on backhaul costs + Layer 3 etc... should be reasonably priced right?

    So at the very least, Telstra's wholesale charges for their copper network ("up to 12Mbps") should be tied to their wholesale charges for aggregated NBN (at 12Mbps).

    (Similarly for "up to 25Mbps" I guess. I wouldn't mind seeing them wholesale HFC at the same prices and speeds TW will offer NBN Wholesale, but maybe that's a step too far).