Do Broadband Our Way: Telstra Rivals

The Age

Thursday June 29, 2006

JESSE HOGAN, TELECOMMUNICATIONS REPORTER

A COALITION of Telstra's rivals has rubbished the dominant telco's plan to spend $3.1 billion upgrading its broadband network, but still wants Telstra to chip in to build a similar network.

The coalition of nine is made up by AAPT, Internode, iiNet, Macquarie Telecom, PowerTel, Primus, Soul and TransACT.

They proposed shared ownership of a fibre-to-the-node (FTTN) network more than two months ago but have yet to reveal exact details on how the network would be funded, owned and operated.

FTTN involves the building of nodes - mini telephone exchanges - to increase broadband internet connection speeds to 4 million homes and businesses, by ensuring they are within 1.5 kilometres of fibre optic cable.

Telstra wants to build an FTTN network in Australia's five biggest cities but will not reveal exact details unless protracted negotiations with the Australian Competition and Consumer Commission are resolved.

The coalition yesterday released a working paper, created by dandolo partners and the Allen Consulting Group on its behalf, which described the Telstra FTTN model as an "ideal technology for an incumbent with anti-competitive ambitions".

"The competitor will be in the same position as an airline offering propeller aircraft in the 1950s when a competitor introduced jets," the report said.

"Because FTTN cannot be unbundled, and under Telstra's proposed network it will control the end-to-end service, the problem of potential sabotage will be profound."

But Telstra spokeswoman Liz Jurman said competitors would be able to offer their own unbundled broadband services on its proposed FTTN network, rather than being forced to re-sell Telstra broadband.

"Telstra's fibre-to-the-node proposal will offer true wholesale competition, yet they are criticising it on the basis of resale competition which is an inferior competition model," she said.

"They have issued a critique that is not based on the facts of our proposal, so their critique is totally lacking in credibility."

Telstra has previously dismissed the coalition's shared ownership plan but it is likely to be raised again today when Telstra chief executive Sol Trujillo addresses the National Press Club in Canberra.

© 2006 The Age

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