ISPs welcome Telstra broadband decision

ISPs welcome Telstra broadband decision

ISPs are applauding Telstra's decision to open up wholesale access to its ADSL2+ broadband network but have expressed concerns over pricing.

Last week, Telstra confirmed it will offer ADSL2+ network services as a wholesale product to other ISPs. The telco giant raised the ire of competing ISPs when it revealed plans to rollout a national ADSL2+ network in February but failed to provide details on whether it would grant wholesale access to the new service.

The ADSL2+ rollout, which was completed in April, saw services switched on across over 900 exchanges covering 4.2 million users.

"Telstra Wholesale has always said that we would consider selling ADSL2+ if and when it made commercial sense to do so," Telstra spokesperson, Martin Barr, said in a statement. "Since we received assurances from the ACCC that they won't interfere we were more confident about taking a look at our commercial options."

Barr said access to the ADSL2+ network for wholesale customers will be subject to discussions. Pricing will also be determined through confidential negotiations.

Back in February, Telstra CEO, Sol Trujillo, said its decision to flick the switch was prompted by the new Federal Government's reassurance that third-party access would not be regulated. But this lack of regulatory certainty released a barrage of complaints from ISPs, who accused the telco giant of anti-competitive behaviour by barring wholesale access to the network and called for the watchdog to take immediate action.

Several players welcomed the latest news but said the impact of Telstra's decision depends on its ADSL2+ wholsale pricing.

"Telstra won't be the first carrier to offer this product [Optus and iiNet/AAPT also offer ADSL2+ services wholesale], so if they're serious they need to offer market competitive pricing," Netspace regulatory affairs manager, Ben Dunscombe, said. "If they come to the table with competitive pricing it would be a very welcome step and an open gesture on their part as a decent corporate citizen."

Internode managing director, Simon Hackett, said it was "about time" Telstra confirmed its wholesale plan for ADSL2+.

"We aren't in receipt of any sort of commercial offer, or timeframes, or costs, to date - so at this point in time, it's still vapourware," he said. "We look forward to it becoming real and we hope Telstra actually do it - and soon - and on reasonable commercial terms. The next move is up to them."

News on ADSL2+ services also raises questions about whether Telstra will offer wholesale access to its nextgeneration broadband network should it win the government's multi-billion-dollar National Broadband Network tender. The tender was released in April. Others known to have submitted a bid include the Terria consortium led by Optus.

"Telstra can't come in with their normal inflationary pricing [for ADSL2+] otherwise it's just a show and doesn't bode well for their open access model for the fibre-to-thenode [FTTN] network if they win," Dunscombe said.

According to a recent report by the Centre for International Economics, Australian consumers could pay an additional 15 per cent for broadband if Telstra secured the next-generation network contract.

Ovum research director, David Kennedy, was unsurprised by Telstra's decision and certain the telco would offer wholesale access to its next-generation broadband network.

"Telstra's approach to wholesale is that they've always been happy to offer product, but they don't like regulated pricing," he said. "Pricing will emerge with access seekers - I don't think there will be one standard price for everybody."

Telstra's Barr confirmed it would keep its FTTN network open should it win the tender.

"Product will be available to wholesale customers and Telstra retail on equivalent terms," he said.

While many in the industry believe a structural separation of Telstra's retail and wholesale arms is the only way to prevent further anti-competitive behaviour, Barr stressed Telstra was against it and insisted its plans to offer wholesale ADS2+ were not linked to ongoing discussions about the structural separation.

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