Home Industry Strategy Praise all round (almost) for Government's new telecoms strategy


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Let's not call it a national broadband strategy any more because the regulatory changes envisaged by the Government's announcements this morning will change the telecoms landscape in Australia irrevocably, and many participants believe these changes will be very much for the better.

Even Telstra welcomed this morning's announcement by the Government, but significantly Telstra focussed on the opportunities to be created by the proposed $43b investment over eight years to take FTTP to 90 percent of Australians and 12Mbps via other means to the rest.

Telstra largely ignored the related announcement of plans for major regulatory reform which are likely to transform Telstra dramatically over the next few years through the functional separation it has so vehemently opposed under the four year reign of CEO Sol Trujillo and his 'amigos', most notably COO Greg Winn.

Telstra chairman, Donald McGauchie, said: "We look forward to having constructive discussions with the Government at the earliest opportunity...Telstra has publicly advanced the need for high-speed broadband for a number of years and shares the Government's strong desire to make high-speed broadband widely available to all Australians as a key enabler of economic growth and social development."

On the prospect of Telstra facing draconian new regulation, McGauchie said: "Senator Conroy has said today that the Government does not have a pre-determined view on regulatory matters. Telstra welcomes the opportunity to provide input on the regulatory reform discussion paper."

Other commentators, some unwilling to go on the record, expressed the view that today's outcome was the culmination of years of Telstra playing hardball with the Government and the regulatory, and had it accepted the inevitability of change the outcome could have been very different.

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Internode CEO, Simon Hackett, writing on Whirlpool, observed: "Telstra can't complain (though they will!) – because after ignoring the chance to be a nation builder themselves by building an FTTH network themselves (and they're still welcome to do so), and which they could have afforded to do – the government will instead build a new, wholesale only, end to end fibre network that every carrier (including Telstra) has equal access to."

The Competitive Carriers' Coalition was mightily pleased with the outcome, with executive director, David Forman, saying: "We congratulate minister Conroy and the Government on making such as far-sighted decision on industry reform in a way that no Government had previously been willing to do...Australian communications competitors and consumer representatives have called for reforms to create a competitive level playing field for 15 years, and these changes have the potential to do that."

Forman said that "The reforms are long overdue, as evidenced by the internationally high prices and poor services Australians have suffered for more than a decade," but predicted that the mere fact of them being underway would produce results ahead of any formal implementation of new regulations or new networks. "Overseas experience shows that it can be confidently predicted that competitors will respond immediately even if the start date for some aspects of the reform package are ahead of us."

He told iTWire "Telstra is not back in the game...Telstra is in an entirely new world. Telstra won't build this [the FTTP network]. This will be paid for by people who build pipelines and dig big holes an build railroads, not by telcos.

"Telcos will invest their money in retail business and in applications where they should invest their money to enjoy retail rates of returns over a shorter period of time. Super funds will be the ones who will be looking at this."

"Telstra will have to ask itself what sort of business it is going to be. It can't be the owner of this network and a retailer and wholesaler, but it can have a very prosperous future as a retailer and wholesaler [of telecoms services]."

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He also did not think Telstra had much chance of fighting back using Next G and its HFC network. "The discussion paper [on regulatory reform] is canvassing putting spectrum caps on Telstra and forcing them to sell their HFC network."

Primus Telecom, iiNet and Macquarie Telecom - all members of the Optus led Terria consortium that more or less dissolved at the 11th hour leaving Optus as the main respondent to the NBN RFP were all equally ecstatic.

Matt Healy, Macquarie's national executive regulatory and government, said: "We applaud the Government's decision to seriously consider implementing wide-ranging reforms to the telecommunications sector as a matter of urgency...This has the potential to be the most significant change this industry has seen since deregulation in 1997. And just as deregulation kick started competition, today's announcements have the right ingredients to set a solid foundation for a truly competitive 21st century telecommunications industry."

However he seems to have been overly optimistic in predicting that "By next year we will see a brand new network, the envy of other economies."

Primus CEO Ravi Bhatia, said: "If you consider the list of issues identified by the Government [in its regulatory reform discussion paper], it is clear the Government is serious about addressing Telstra's stranglehold and unlocking the competitive potential of the industry. As an industry we have been arguing for better competitive rights and raising many of these issues for some time now so it's satisfying to see a Government with the courage to deliver on the competition rhetoric and take these issues on."

iiNet managing director, Michael Malone, said: "This is the best of all possible outcomes and will ensure Australians have access to fast, affordable and competitive broadband. In terms of the key criteria we were looking for in a National Broadband Network - open access, structural separation, fixing backhaul 'black spots' and regulatory reform - the Government has delivered."

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Both the Australian Information Industry and the Australian Computer Society looked beyond the FTTN to call for an immediate focus on the services that it would make possible. ACS chairman Kumar Parakala, said: "There remains a missing link – a national strategy for the development of our digital economy. With the pipe in the ground, there will be opportunities for the development of value added services which propel our future economic growth, such as e-health, e-education and e-commerce.

"These e-services will ultimately provide Australia with a platform to increase its participation in the global market. The flow-on effects from access to high quality infrastructure are estimated to increase GDP by 1.4 percent after five to six years, which is $15 billion in terms of GDP from 2007-2008 GDP figures."

AIIA CEO, Ian Birks, told iTWire. "It is a bold and creative solution. We believe it has a lot of merits...We just want this to be got on with as soon as possible and we think this is the start of the conversation we need to have about the valued added services we can have as a result of [building the FTTN]. We want to focus on the eHealth, smart metering, telecommuting opportunities, etc."

Internode CEO, Simon Hackett, on Whirlpool, said: "This is the first national wholesale only broadband network, not controlled by Telstra (or anyone else). Solves once and for all the core problem with privatisation, blocking competition due to failed policy around Telstra and network access. This draws a line under a decade of a policy of neglect... If they do what they promise, they've actually got it right, and we might just turn into a broadband front-runner country ten years from now... after all."


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