Gov't promises better broadband on the cheap

Stuart Corner
Tuesday, 05 June 2007 17:53

Opinion and Analysis

Telstra also resorted to scare tactics. According to on report, "the four hour briefing was designed to demonstrate how delicate and interconnected the network was and how any outside interference would have disastrous consequences for the reliability and efficiency of the telecommunications system."

When details of Telstra's advanced planning, as revealed in the briefing, were reported the Competitive Carriers' Coalition (CCC) reacted angrily. "Details of Telstra's secret briefing to selected journalists last week proves one thing only – that Telstra was lying when it said repeatedly last year that it had abandoned its FTTN plan. It now admits it has been signing up contractors and doing preliminary work all along. Clearly, Telstra was always going to go ahead with its planned FTTN network upgrade, it just believed it could force the Government to abandon the ACCC and give it special favours to lock in a return to monopoly just before the election in order to stop Telstra's political attacks."

The CCC renewed calls for full operational separation of Telstra's network and services arms. "Separating decisions about network operations and investment from Telstra retail activity would remove the incentive for Telstra to behave so appallingly...This is what is happening around the world, and Australia is a global case study in what happens if this sort of overwhelming monopoly market power is not brought in check."

This might well be the optimal solution but it won't provide the quick pre-election fix that the Coalition is seeking. Costello, naturally is trying to position the Coalition's approach to broadband in opposition to the ALP plan to spend $4.2billion from the Future Fund to build, in conjunction with private equity, an FTTN network. The economics of the ALP plan has come in for much criticism, but at least it does demonstrate vision and leadership and sets specific goals for speed and reach of its planned network.

In response to today's reports of the cabinet meeting, shadow communications minister, Stephen Conroy, said: "Treasurer Peter Costello's comments that he wants a fibre to the node network rolled out in Australia 'quickly' and without public money shows the Howard government intends to create two classes of broadband service in Australia: one for the five mainland capital cities and another for the rest of the nation...Neither the Telstra nor the G9 proposal spruiked by Mr Costello today will roll out a FTTN network beyond the five mainland capital cities without government investment."

Also, Costello's boasts that Australia will get an FTTN network without the need for taxpayers' money sound extremely hollow against its record of having spend $4 billion under no less than 17 separate programmes providing broadband and other critical telecommunications infrastructure in recent years. And there was  speculation that today's cabinet meeting took the, overdue, decision to award the Government's $600m of funding for regional and rural broadband infrastructure to the Optus Elders consortium, Opel Networks, and that it will allocate an addition $300 million to providing broadband in regional and rural Australia."