Telstra talks broadband regulation, Libs let fly

It's not at all quiet on the fibre-to-the-node (FTTN) network front, as telcos lodge their submissions on regulatory issues for the AU$4.7 billion national broadband network (NBN) and the Liberal party throws a spanner in the works by starting an inquiry into the government's handling of the network tender.

According to Kate McKenzie, Telstra wholesale group MD, Telstra is fully behind an open access network where the telco has called in its submission for new legislation to lock in the terms of core wholesale access to the network.

"If this network is going to be built, the builder needs up-front certainty that its investment will not be undermined or given away by regulatory changes once a decision to invest is made," McKenzie said in a statement.

"It's not just Telstra — for anyone who's going to spend 10, 15, 20 billion dollars, you need some certainty," a Telstra spokesperson added.

The submission also says the building of the network should not be split up between bidders and that the new network should not have to be backwards compatible with old technologies.

To regulate the network new rules are needed, according to Telstra's McKenzie, as some regulatory processes will be made redundant. "The current regulatory framework never envisaged the type of network, products, applications and services that the NBN can provide. If we continue to regulate for plain old telephone services then we are going to end up with plain old telephone services."

In its response to the submission, iiNet said that Telstra is looking to castrate competitors by rendering them simple resellers of Telstra products. Innovation will go by the wayside, the company believes, using Telstra's late switch on of enabled ADSL2+ services as an example.

Optus also lodged a submission which, like Telstra's, calls for regulatory reform, but for different reasons.

"We have a once in a generation opportunity to get the regulatory settings right to encourage a vibrant and competitive broadband market and to deliver the government's bold visions for this infrastructure," Maha Krishnapillai, Optus director of government and corporate affairs, said in a statement.

"With its dominant market position, Telstra has held both the telecommunications industry and the Australian economy to ransom for decades. It has made no secret of its desire to use the NBN to raise prices for consumers and increase its profits, already high by international standards to world record levels. If the government takes bold steps then competition will be enhanced ensuring Australians receive the lowest possible prices, the best possible service and the greatest degree of innovation."

Structural separation formed the core of the document, according to the company, which says separation will stop a multi-year cycle of fear, delays and litigation which has been killing competition.

Even with separation, Optus says the ACCC will need to have a strong role in the NBN.

The submission does not focus on a winning Optus case, but says at the start that it is bringing forward the regulatory reforms which are necessary "if Telstra be chosen to construct and operate the NBN".

Terria also made a submission demanding structural separation of the winning party, as well as outlining the minimum access wholesale buyers should receive: services which allow flexibility of seekers' retail offerings; the ability to build onto the network where it makes financial sense; a point to point service providing backhaul; a telephone service; and a platform for services such as broadcast IPTV.

The group wants the ACCC to take the reins, assuring that the network operator receives a return to make the risk worthwhile, but doesn't allow "gold plating".

One big happy family?
The best result for Australian consumers, according to Paul Sullivan, Optus CEO, would be if Telstra were to join the Terria party. "Optus and Terria have said time and time again that we are ready, willing and able to deliver a national broadband network. We are willing to co-invest with parties across the industry — including Telstra — to get the network built," he said in a statement.

"Why not co-invest with Optus and Terria in providing competition, fairly priced high speed broadband to as many Australians as possible."

Telstra said, however, Optus's logic is twisted and shows Optus's desperation.

Meanwhile, Conroy battles the opposition
The Federal opposition has used its Senate majority to send the Rudd government's national broadband plans to an inquiry, successfully moving to set up a select committee to report by 30 March 2009.

The Senate committee will have an opposition majority, and must examine the impact of the government proposal on service availability, choice, costs and competition in telecommunications and broadband services.

It will also examine the "likely consequences for national productivity, investment, economic growth, cost of living and social capital".

The government accused the opposition of abusing its Senate majority and seeking to sabotage the project.

"First there is the potential for this inquiry to undermine or jeopardise a live commercial process, already under way," Broadband Minister Stephen Conroy said.

"Have an inquiry at the end, when we've made a decision, feel free.

"But to actually try and interfere in a live commercial tender process is grossly irresponsible, and you should be embarrassed."

The inquiry was unnecessary because there was already a robust public debate going on about the project, Conroy said.

Furthermore, stakeholders would be constrained from giving thorough evidence because of the current proceedings of the commercial tender process, Senator Conroy said.

The committee must seek input from the telecommunications industry, industry analysts, consumer advocates, broadband users and service providers.