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The first case was about others sharing the network. No Telstra customers were disconnected, with only spare copper pairs being used.
This time, the whole cable is going to be commandeered, with Telstra's own customers being moved. This is a whole new ball game and probably a new High Court decision.
"This time, the whole cable is going to be commandeered, with Telstra's own customers being moved."
Incorrect, all the copper won't be commandeered, it will still be the same copper as what is being used now. Only except it being all the way from the exchange to the premises it will be from a closer location. In actuality less copper would be used per customer than there is now.
Terry, you totally missed the point. You are right in that it is the same copper - that is the problem. The issue is that Telstra will have it taken off them. They will not be able to use their own property to deliver their own services to their own customers. The copper will effectively belong to whoever builds the NBN.
They won't have it taken from them, they will be fairly compensated, just as they are now.
And what then do you suggest is fair compensation ?
A Million Billion Dollars for the ripping up of a great australian company! telstra should be imbersed as much as humanely possibly to pay for this atrocity! somewhere around 2 years of australias full GDP would be decent, to reflect the amount Telstra has contributed to it over the years, for aust to then turn around and stab them in the back!
I think your under estimating telstra worth to this country, they ARE the communications networks! I reckon telstra should sue everyone they humanely can, governement, RFP participants, the aust public! anyone who dare stand against this companies wishes should be punished with expensive legal fees at the very least!! Telstra is all! Telstra is Australia! Telstra owns your phones and you must pay pennance!! Give yourselves the the almighty T and though shall be rewarded with thy Next G network, a network of godly proportions!
"And what then do you suggest is fair compensation ?"
I thought the high court had already decided that.
Telstra isn't even worth $80bn. It takes me back a few years to when a bloke called John McConachy got shafted by the National Australia Bank when they chose not to buy his software package and he replied with a $50bn damages claim, again a claim that at the time was worth more than the defending entity.
It will be interesting to see how this goes but I reckon it will be a flop for Telstra - they are already going to be compensated for any connections removed from their network under the broadband proposal.
Telstra valued the pstn at A$0 two years ago. Fitting compensation for access to the copper from the last node to the home would be $0.
It is true that some access to copper for last leg of network to housebusiness will be needed. However, this is not appropriating the copper any more than ADSL or ADSL2, whereby the copper is used to carry additional information, as well as telephone calls. And this is the 'access regime' to which Conroy refers.
Most regulators around the world (since MaBell was split into AT&T Long Lines and various regional telcos almost half a century ago) have used return on assets employed (ie after factoring in all needed maintenance costs) or essentially an ROI for a regulated asset class, versus industry-average returns in that industry.
So, in fact, to be fair, one would take into account the idea that Telstra had valued the PSTN at nil, but that was primarily because it needs lots of maintenance, compared to wireless/mobile networks. But in reality, the regulator would need to look at the fairly-allocated costs to maintain the copper, and the other revenue streams derived from it, to deduce a fair 'wholesale' price. Australia has done very poorly in this field, compared to the US etc. The Australian national electricity grid has a cost component for shared use of existing high-voltage wires and pole-to-consumer 415-volt supply, which works. At the other end of the spectrum, Telstra has always put forward overly-inflated retail hourly costs per linesman etc to muddy the water as to its network costs. All that has been deduced thus far over decades is a cost to invoice and collect payments from a telco customer, allowing a reseller function, but no true/fair wholesale costs. The NBN will force a rethink of that process, and force greater transparency on Telstra. But to be fair to Telstra shareholders there will be no simple answer - the only fair method is for the regulator to receive submissions each and every year, based on actual costs for maintenance, ROI etc, and to then fairly determine a wholesale price for the next twelve months. It is no harder than setting a price for other utilities, such as water or electricity, where a large complex network is needed (ie high fixed cost), but the true variable costs are low.
The electricity grids in Australia are divided into state-wide assets, all of which are either still owned by state governments or were once so owned. There is more competition in electricity because of the number of companies/statutory authorities that own parts of the transmission networks.
In Telecommunications, because the national government once owned the only network there is only one current owner, that being Telstra. As there is only one owner, regulation has created an environment where competition was thought to have worked but simply cannot.
As newer players like Pipe come along and lay their own cables, this will change the way competition works - from a false economy that describes the current situation to one where real competition exists.
Mel, when the state governments ran the electricity, there was only one company any given person could go to. Now, with so called 'competition', there are a number of retailers that, because it is the same electrons running through the same power lines and using the same substations, are essentially the same.
The lack of competitive infrastructure build in the telecommunications industry has led to a similar situation - we have 50 different flavours of Telstra. Sure, the insistence of the ACCC of setting wholesale rates based only on the incremental costs only and leaving Telstra's customers to pick up the tab on the rest allows Telstra's competitors to compete against Telstra with its own products at a discounted rate, but apart from that, there is little difference.
The big exception is in the mobile network where there are four distinctive networks and healthy competition.
A$0 is exactly what this pig ignorant post of yours is worth. At least all of the other posts received on the issue so far, were worth looking at !
I think the $0 issue raised by the other users is perfectly relevant. I dont' agree with Telstra's assumption that their network is worth nothing but what it does show is that they are more than prepared to change the story to suit themselves.
The other issue is that Telstra was once worth $120bn as a company going by their once-high share price. Government policy hasn't changed much since that time and now so I fail to see why their shares are only worth about $3.40 at the moment, valuing the company at something like $55bn.
Funny thing about company value is, about 12 months ago I seem to recall Telstra being the 4th largest company in Australia behind BHP, NAB and CBA?
Today according to ComSec
1. BHP $100.4b
2. Telstra 46.3b
3. CBA 38.8b
4. NAB 37.4
So Telstra have faired ok in very tough economic circumstances, in comparison to most. They have actually climbed the ladder to become Australia 2nd largest company behind BHP, even with the large fall in Maket Cap, following the NBN announcement.
Incidentally, I didn't realise how small Optus actually are, with Market Cap of only $1.2b. So whilst a $4.7b injection would have been nice pocket money for Telstra, for Optus it would be like being handed another 4 Optus'.
I agree with you Mel, this certainly makes Telstra shares at the current level, which is actually $3.72 not $3.40, up over 10% on the $3.36 low following the NBN announcement, still seem undervalued.
Especially with the attractive dividend yield and talk of $b's in compo, which if some of these crazy figures were to come to fruition, "could" catapult Telstra to Australia's number one company? Did I hear someone say "special dividend" of say 10 - 20c per share, if this were to happen?
Whilst I an no expert, perhaps typically along with Woolies, Fosters and even the banks at these attractive prices, Telstra are now a nice defensive stock to buy into in these tough times, "regardless of whether you love them or hate them" - lol.
Might even get some myself.
Your comment seems like a fair and astute opinion to me.
Sounds like an all too familiar modern day story...."I've been attacked by a **** playing the victim!"
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This sounds like a broker who has lost a lot of money on Telstra shares and is hoping that spreading some rumours will help turn the drop around. Best of luck to them, but until something is set in stone it's not going to help them.