Alternative telcos pick apart Telstra FTTN proposal

29 Jun 2006

Nine of Australia’s largest alternative telcos have taken the unprecedented step of banding together to release a research report highlighting what they claim are key problems in incumbent operator Telstra’s plans to deploy a nationwide fibre-to-the-node (FTTN) network. In April AAPT, Internode, iiNet, Macquarie Telecom, Optus, Powertel, Primus, Soul and TransACT called for collective investment in an open access next-generation network (NGN) as an alternative to Telstra’s proposed new network. The nine commissioned dandolo partners and the Allen Consulting Group to formulate a report highlighting problems with Telstra’s FTTN plan. The study claims that Telstra’s proposed network only reaches four million homes and businesses, which would effectively create a ‘two-tier Australia’ where less than half of the population would be able to receive high speed broadband. They claim the plan would establish Telstra as the monopoly provider of FTTN services, because competitors will not be able to use unbundled elements of the FTTN ‘due to technical and economic reasons’. Furthermore, they say, the plan would enhance Telstra’s ‘capacity to sabotage its competitors’, something it has oft been accused of by rivals.

The consortium says its alternative NGN proposal will be completed ‘in the coming weeks’. The as-yet unfinished plan is expected to cost around AUD3 billion (USD2.2 billion) and will be submitted to the Federal Government and the Australian Competition Consumer Commission (ACCC). Telstra’s rollout of next-generation services has been much delayed as the incumbent argues with the ACCC over how rivals will access the new network. The nine companies hope their proposals will be welcomed by Telstra and that the incumbent will back them instead of rolling out its FTTN network alone. However, a Telstra spokesperson dismissed the idea when it was first floated in April, with a spokesperson memorably comparing the proposal to ‘pitching a tent on top of a skyscraper then demanding rent from all the tenants.’