Basslink bites back: plans to be a wholesale carrier

Stuart Corner
Thursday, 15 May 2008 11:40

Business IT - Networking

The owners Basslink power cable linking Tasmania to the mainland seem intent on using its optic fibre to become a wholesale telecommunications carrier, rather than simply selling dark fibre access to a third party via the Tasmanian Government.

Singapore based CitySpring Trust, which bought the cable from its builder National Grid in mid 2007, issued a press release saying it had been awarded a carrier licence and had "actively negotiated access to capacity in Victoria, managed a comprehensive procurement programme to select a vendor to light our network from Melbourne through to the regional centres of Tasmania, recruited specific commercial and technical management support and engaged actively with prospective wholesale customers.

When Basslink was built, a fibre optic component was added with the intent of making some of this available to bolster Tasmania's broadband capacity and increase competition for provision of broadband. The Tasmanian Government has long-claimed to have had an agreement with Basslink for access to this fibre, and is paying $2 million per year for 15 years for what is believed to be some form of deposit towards a full usage agreement. However statements made by the Government seem to indicate that it planned to negotiate access to the dark fibre and hand this to its chosen strategic communications partner, Aurora Energy, which would have been responsible for interconnecting the Basslink fibre to other services on the mainland.

In a competitive market the revenue, and margin that CitySpring would be able to extract from such a deal would be much less than from providing wholesale bandwidth services terminated on the mainland in a data centre where they could be interconnect however a wholesale customer chose.

It would therefore seem that the Tasmanian Government's agreement with Basslink's previous owner did not lock in access to the dark fibre and CitySpring, not surprisingly is looking to capitalise on is new asset to the greatest extent possible. CONTINUED