Telstra Battles Along Slow Road To Faster Broadband
The Age
Thursday April 13, 2006
AUSTRALIANS will be given a chance as early as next month to give their verdict on a $3 billion plan to overhaul the nation's broadband network.
Significantly boosting the speed of residential broadband internet connections has been high on Telstra chief executive Sol Trujillo's list of priorities since he took over last year, but his plan had stalled over negotiations with the competition watchdog about how much Telstra can charge its rivals to use the upgraded network. Australian Competition and Consumer Commission chairman Graeme Samuel has confirmed that negotiations between it and Telstra have been constructive. "The very fact we are in constructive discussions I think is an improvement," he told The Age yesterday. "We are working well together . . . but there is a lot of work to be done." The speed of most ADSL-based broadband connections in Australia is significantly slower than overseas, as the existing copper wire network can only deliver at high speed when it is within 1.5 kilometres of a telephone exchange. The fibre-to-the-node network that Telstra proposes would overcome this problem because fibre-optic cable transfers data much more efficiently than copper. In a speech to analysts yesterday in Sydney, Mr Trujillo confirmed that Telstra would invest in the technology only if it promised to be profitable. "We've been having an argument that says if we put in fibre-to-the-node, and we make it available to our competitors, we want to price it at levels that allow us to earn competitive returns on it, and not below cost," he said. Mr Samuel reassured other telcos that the ACCC had not signed-off on Telstra's plan. "We wanted to reassure the industry that the public consultation will take place before anything is finalised," he said. The ACCC hinted that Telstra's broadband plan could be made available for public consultation by next month, but ABN Amro telecommunications analyst Ian Hunter said previous consultations indicated the process would take many months. "That process took a year in the Foxtel case before the ACCC gave their approval, so we're not looking for an approval or an undertaking next month," he said. Mr Martin said a court ruling in 2000 that allowed Seven Network access to Telstra's $3 billion cable broadband network, intended to be used exclusively by Foxtel, meant the telco was unlikely to start work on the new network until the ACCC gave final approval to the plan. "I think Telstra will be very careful this time around to make sure that they didn't do anything and didn't give any signal that they were going to do this network . . . until they'd actually got the approval." ? Optus has avoided a costly legal battle with Telstra over broadband advertising after reaching an out-of-court settlement yesterday. Telstra had taken Optus to the Federal Court, alleging its $19.95 ADSL offer was misleading and deceptive. Optus was not represented at the brief hearing, but Telstra's counsel, Charles Scerri, QC, said Optus had voluntarily agreed to change the fine print on its advertising for the plan and to pay Telstra's costs, although the $19.95 plan did not have to be withdrawn. Justice Donnell Ryan then dismissed the matter.KEY POINTS ? ACCC says fibre-to-the-node talks are nearing completion.? Public to get a chance to comment on Telstra's plan.? Faster broadband speed is key to Sol Trujillo's strategy.
© 2006 The Age