Government annoyed at Telstra, seeking a ‘Tender’ FTTN

Phil Burgess attacking the ACCC and showing support for an ALP tax payer funded broadband plan was the last straw.

Telstra have now placed themselves in a dark spot.

The government is going to establish a committee to review and create a framework for faster broadband services and use this, as a sticking tool to guide proposals, and determine if they are what could be deemed fair in the area.

The review committee DOES consist of Graeme Samuel, among others.

Peter Costello was quoted by several media sources in a manner that would lead one to believe that he does his job, and does it well, espiecially with Telstra.

This committee has a few tasks at hand it should look at.

Costs of starting an ISP under any proposed model. Will it put it just out of reach for the fly by nighters, but definitely in reach, and allow for workable solutions for ISPs that mean business?

The differential aspect of ISPs. Sure, competition is great, but there’s no point if all 240+ ISPs offering the technology are restricted and are offering the same technology, it’d be pointless.

Competition model. The proposal should encourage competition, and move as far away from the current price squeeze we have with Telstra Wholesale right now.

Guaranteed Services. No point creating a network if its going to be torn to shreds by leechers. So, the proposal must allow for expansion, encourage innovation, and provide some guarantee behind services being provided, so that no one is going to get a “no” answer, to having a fault fixed, and more to it, everyone is going to be getting a service where it is commercially fit to do so.

With these in mind, as a minimum, they should create a governing framework around them which any proposal needs to fit within prior to be considered acceptable for a monopoly style service.

That’s saying that they should state the costs, and state them accurately, they should state any proposed regulatory requirements, and the effects they’ll have on competition, they should state exactly how the proposal satisfies the above, and agree to satisfy the above.

Essentially, the goal should be to outline all the factors stopping investment in this country, and identify ways of encouraging investment, as well, it should allow for investors in any company to not be out of pocket.

That is, not in support of Telstra, but it should allow prices to be priced at a level where the investment will pay for itself, and give shareholders some return.

In the case of a national proposal, they should state the areas they plan to cover, and the extent that coverage is going to cost, and take, and just how they will look after the areas they are in, as well, it should not restrict competition in other networks in areas where they have no intentions of extending to, allowing for two networks.

With all that in mind, the idea at the end of it all is to place a tender for the FTTN, allowing for price based competition on the price. So, we have $30 from Telstra Wholesale, $28 from G9, $26 from Elders, $22 from iiNet, $16 from Internode, $9.90 from DoDo.

And we all of a sudden can find the middle ground of what can be classed as an acceptable proposal in the $16 to $28 price bracket.

And with that in mind, they COULD allow for bids to be bounced off each other, in true auction style, and see who’ll do it cheapest, and the Government sets the criteria it must meet. Eg. Service all customers in a single area, Provide at least 24Mbps to those people, Service established by end of November 2007. With all those in mind, they could hold an auction for bidders to get the rights to do such a network!

That’d have Telstra out for sure. And we’d all benefit.

One common argument that people use to favour Telstra is they have experience building networks.

I’m surprised anyone can say that. Telstra limited ADSL1 to 1.5Mbps for 7 years, later, they gave us 8Mbit, but with a 384kbps upload.

Looking at JUST that, we can clearly see they lack basic network management skills.
iiNet and Internode have VERY happy customers on their ADSL2/2+ plans, with speeds in excess of 12Mbit.
Just that alone shows that Telstra are either very slow, or lack experience building networks.

They of course have had the copper network for years, and to add to the above, it’s got 18% of lines with faults.

Doesn’t look like great network OR asset management to me. The opposite would apply, its poor to say the very least.

The tender process does seem like a good move for our FTTN network. Let’s just see if they get it up and going before the election, and that might encourage a change in votes. I don’t want to see our country destroyed by Labour again, but I don’t want to wait another 11 years for anything close to broadband to arrive here.

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