Telstra lodges NBN bid that isn't

Stuart Corner
Wednesday, 26 November 2008 06:31

Business IT - Networking

The government promised that the network would deliver a minimum of 12Mbps to 98 percent of the population, but Telstra says this is not achievable. "Firstly the cost to build increases exponentially towards the 98 percent level thus requiring a much larger Commonwealth contribution...Secondly the current economic conditions have significantly increased the build costs and the cost of capital....Key components of an FTTN optic fibre and computerised nodes are all priced in Euro or $US and thus are now 30 percent more expensive than was the case a few months ago.

"This has added in excess of $1 billion to build costs in the proposed footprint alone. Thirdly, higher funding costs and the potential for slower take-up rates in a slower growing economy are also very significant.

Telstra is promising an entry level price of $29.95 per month for a 1Mbps retail broadband service.

Telstra says the network would be open access, with wholesale customers buying access services on an equivalent basis to Telstra's retail units under rules legislated and policed by the Australian Competition and Consumer Commission.

Telstra is not seeking any legislative protections against competing infrastructure but says the proposal is subject to a number of conditions for the life of the project, including no further separation of Telstra and regulatory certainty.

"Unlike others, we do not seek any form of overbuild protection. SingTel-Optus, TransAct and others have existing competing fixed cable networks passing the homes of many millions of Australians in capital cities, regional centres and new housing developments that are already at, or are upgradeable to, speeds that match or surpass FTTN based network speeds. All industry participants should be free to invest in expanding and upgrading their networks as and when they wish."

However the ability of any of these to compete with a Telstra-controlled upgrade of its ubiquitous copper telephone network would be very questionable.