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Telecommunications Telstra rivals call for jointly-funded FTTN network
Telecommunications Telstra rivals call for jointly-funded FTTN network | Telstra rivals call for jointly-funded FTTN network |
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| by Stuart Corner | |
| Friday, 21 April 2006 | |
  
Under the proposal - backed by Internode, Macquarie Telecom, Optus, PowerTel, Primus, Soul and TransACT - Telstra would be joined by other telcos and ISPs in making the necessary investment to upgrade the existing copper local loop into a high bandwidth fibre to the node network. They say the initiative will "broaden the debate and give the ACCC and Government options they can accept – without putting competition at risk." "This approach will deliver high speed broadband services to more Australians, more quickly, than if the new network was a Telstra monopoly," Macquarie Telecom CEO, David Tudehope said. The backers clearly believe their proposal will engender strong support from Government, the ACCC and consumers. Optus CEO, Paul O'Sullivan, said: "It is clear that Australia's broadband future is best served by a co-ordinated approach to building an open access network. Our proposal will also bring greater competitor access to services and this in turn will deliver improved broadband competition, better prices and product innovation." He added: "This is a ground-breaking proposal. It has all the key players in the Australian telecoms industry coming together to make a proposal that is in the best interests of Australia. It means that broadband will arrive faster with a greater degree of choice and will reach significantly more homes than under the Telstra proposal. So we believe that it will get strong support from Government, from the ACCC and most importantly from Australian consumers." One key player missing is AAPT, which is in the midst of a "strategic review" widely expected to result in the company being sold. A spokeswoman said it was difficult to make any long term commitment to a project such as the FTTN proposal while the review was underway. O'Sullivan said the consortium members hoped to reach 30-50 percent more homes than Telstra has indicated it will serve. They plan to develop a detailed proposal which will "set out the benefits that Australia will receive from a genuinely national, open and competitive broadband network". Soul CEO, Michael Simmons, said: "Telstra's planned rollout will go to only four million homes and businesses in the five major capital cities. This will divide Australia into the digital 'haves' and 'have nots', with less than half of all lines being able to receive the new high speed services." Key elements of the proposal are: co-investment in an FTTN network from Telstra's competitors and from Telstra; all parties to be involved in network design so that it can interconnect with the technologies and capabilities of each of the operators; the price of wholesale access will be determined upfront and with certainty so all parties will know ROI and telcos will know pricing; all retail telcos will pay the same access price. O'Sullivan claimed: "This process would offer a faster rollout for Australia because it would provide great certainty arrived at on a commercial basis rather than a lengthy undertakings process through the ACCC...We are appointing economic advisers to assist in this work, and will be putting the proposal forward to Government and the ACCC," O'Sullivan said. Four broad approaches are being proposed, "but Telstra's involvement, and therefore their view, will be key, O'Sullivan said. These are: 1: Interconnected individually-owned networks. Australia would be divided up into geographic areas with Telstra responsible for some areas and consortium members for others, either individually or jointly. "The key issue is that the networks would be built to common standards and with guaranteed interconnection, so everybody's products and services would work on all parts of the network," O'Sullivan said. 2: Telstra-built but jointly-funded Telstra and the other carriers would co-operate on the design of the network and jointly supply the capex, but much of the build would be handled by Telstra. 3: A new local loop owner The existing local loop would be sold to a new joint venture company in which all carriers could participate and work to design, finance and build the new network. O'Sullivan said there were existing models for this in the USA and Canada. 4: Combination of existing access networks The network would incorporate several existing high speed access networks: the Optus and Telstra HFC networks, the TransAct network, Soul's etc and these would be used as the basis for an integrated network. O'Sullivan said that variations of these were possible. "It is on these foundations that we now expect to begin our discussions with the Government and the ACCC and we will invite Telstra to participate." He added that "we have already had informal soundings with the Government and with the ACCC." Optus last year proposed to Telstra joint funding of an FTTN rollout saying it was willing to invest up to $1 billion, but Telstra rejected the proposal. O'Sullivan would not put a number on what Optus would be wiling to commit to the new proposal but said: "We stand by our previous comments and we have an appetite for that order of investment and we would be willing to look at it on its merits. Not all the seven members of the consortium plan to participate as investors. "O'Sullivan said: "some have indicated a strong willingness to invest, other are keen to progress the proposal and some are more likely to want to access the network rather than invest." He added: " There are others who are in discussions." The group appears to be hoping that the merits of its case will see the Government, the ACCC and public opinion pressure Telstra into co-operating if it remains unwilling to do so, but if these avenues fail, "we will be seeking legislative support," Simmons said. He was unable to say what form this might take. There has been much talk that Telstra's planned FTTN network would leave the DSLAMs - in which many of the group's members have invested millions to rollout - as 'stranded assets' in Telstra exchange, and executives of some members have been reported saying they would seek compensation. This same problem would arise whoever builds the FTTN network, and it appears that the group has some sort of managed transition in mind. O'Sullivan said: "Any FTTN network will take a number of years to build out and in the interim, ULL will be a critical driver of broadband competition. It will be a key element of the next three years or so. "So a key aspect of any FTTN proposal is how you protect and nurture the competition that is developing on the ULL rather than try and destroy it. If we can get Telstra involved we are confident there is some way that we can work collaboratively to achieve this."{moscomment} |
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