NBN Co: Killing Telstra copper is the only solution
- 24 August, 2011 12:26
- Comments 4
Decommissioning Telstra’s copper network and migrating all its residential customers on to the National Broadband Network (NBN) is the only viable way to ensure positive outcomes for both the telco industry and consumers, according to NBN Co and the Department of Broadband.
The ACCC running a consultation on the structural separation undertakings (SSU) submitted by Telstra in July.
NBN Co and the Department of Broadband, Communications and the Digital Economy (DBCDE) tendered a joint letter as part of the consultation.
In the letter, both parties saw the $11 billion deal between NBN Co and Telstra as well as additional policy reforms would be the lethal combination that ends the Telstra’s dominance in the telco arena.
The $11 billion agreement deals with shutting down Telstra’s copper assets, including the HFC network, and migrating residential customers onto the NBN.
Parliament passed the Telco reform bill last year which would force Telstra to structurally separate its wholesale and retail arms.
Shadow Communications Minister, Malcolm Turnbull, has been vociferously opposed to the way NBN Co and the Government have been dealing with Telstra as well as the overall rollout of the NBN.
He argued shutting down the HFC network is excessive, claiming it is “economic vandalism”.
Turnbull said if the Coalition comes into power, he would retain the HFC network and rollout the NBN faster and cheaper than the current Government.
But NBN Co and DBCDE disagreed with this sentiment since it would lead to “incomplete structural separation”.
“The HFC network clearly offers the ability to ‘cherry pick’ high value customers, thereby potentially inhibiting NBN Co’s ability to cross subsidise to deliver uniform national wholesale pricing,” both parties said in the letter.
“The Parliament has recently authorised NBN Co to engage in conduct that is necessary to achieve uniform national wholesale pricing.
“Decommissioning of the HFC network would further support the achievement of this objective.”
Without structural separation, Telstra would have to implement functional separation as stipulated in the Telco reform act.
“Functional separation can only ever reduce Telstra’s ability and incentive to discriminate against other service providers in the supply of services over its infrastructure,” the letter said. “It is only through structural separation that the ability and incentives are removed and a truly competitive telecommunications sector can emerge.
“Given functional separation would require unprecedented regulatory intervention, it is unlikely it could be delivered with the same economic efficiency as structural separation.”
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Comments
rational
1
Destroying working infrastructure to meet NBN Co revenue goals for political purposes is obscene.
If there was any cherry picking to be done by Telcos or ISPs then so be it... then NBN Co steps in and does what its job should be... the supplier of last resort for backbone fibre and last mile.
NBNCo is a Government agency and should act like one, serving the citizens of Australia, not the egos of Conroy and Quigley.
ian
2
What a load this is.
Telstra can do what it wants to do, its shareholders paid for the current system and want a return.
The rest can fund it themselves, if they want NBN cough up the money or go away
Kevin
3
To the shareholders, tough.
I am one sick and tired of all decisions being made based on the shareholders. ABN is for all not just a few who thought they would make a fortune out of investing in what once belong to all Australians. You want to gamble with shares, and that is what all investments are, you cop the losses just as you revel in the gains.
Telstra investors were simply gullible to Howard's sales pitch. Telstra was over valued from day one.
As for copper wire why would you "Shareholders" want tp pay out millions maintaining a network that will eventually just sit there doing nothing. That is about as bright as buying into it to start with.
roses
4
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