Telstra is NOT the only choice for broadband

There was a recent article published in The Age, by Kevin Morgan, one of Kim Beasley’s ex-idiot (or employee, whatever you want to call him).

The article claims that Telstra is the only choice for broadband, which is an absolute load of crock.

The article claims Kevin Morgan is an independent telecoms consultant, let me just say, Kevin, pull out now, you can’t get any further behind then the article you submitted to The Age. You might want to consult the telecoms debate a little more and realise just how silly your article really is.

Here’s some of the many reasons why Kevin should perhaps evaluate his current employment.

Telstra is not the only choice. News releases from Helen Coonan’s office say might have more than 2 choices on the table, which is good news.

Kevin claims that the reason why Telstra is the only choice is because they would be able to claim $20 billion dollars in compensation.

What a absolute load of crock. They’d have a hard time cracking the early billion dollar mark, let alone $20 billion, why?

The law suit they propose is the same as that in “The Castle”, where a home is wanted to be taken away from a man and his family for a small sum of money, ie. unjust compensation. They fight the case in court, take it all the way to the big house, and low and behold, they were correct all along, a mans home is his castle, and the proposed payment of funds in return for the ability to knock down the house wasn’t enough, as the man’s home is his home, and should be reimbursed for it, I suppose the factor here is sentimental value as well, a home carries memories of the lives lived inside it.

Back on topic. What memories does Telstra copper have? The big expensive burden it has been to Telstra since the day it was installed? Very sentimental, the attitude of the CEO doesn’t seem to show much emotion towards the copper though.. He doesn’t seem to share the love for the copper wire that the family in The Castle shared for the family home.

The value of the copper network under the proposed “just terms compensation” would need to be determined based on what actions surrounded it.

Telstra aren’t losing the copper network, they will maintain ownership of every last decaying bit of it.

Telstra aren’t losing it’s telephone exchanges, they will maintain and own every last cent of those.

What are they losing? Well nothing to be perfectly accurate.

What the G9 proposal is wanting to do (and any other proposals, including Telstra’s) is put a node in a suburb street, connect all the copper wire from the exchange to the node, and connect a fibre optic cable to the node, and service customers.

They won’t stop Telstra servicing the customers they have, they won’t stop other ISPs with investments servicing customers, they won’t stop anyone servicing anybody.

Telstra still will collect its extremely high ULL rates from the provider that builds FTTN.

Telstra will still be able to have its retail customers connected.

The only change?

Telstra will have to pay to provide services on the last mile to the customers house, using FTTN services.

So, the argument becomes something different.

Telstra will have to pay for something it pays high costs for now anyway, that is, servicing customers via its copper network.

It works a little like this:

FTTN supplier builds node, all copper pairs to houses at the pillar are cutover to the node. Anyone wanting to supply a customer service for a service connected to a node arranges a service from the FTTN supplier, and pays them for it. The FTTN supplier supplies the service and pays Telstra for access to its copper network at fair and reasonable rates.

So, the only .. ” ONLY “.. case that does exist here, is the case of Telstra paying to deliver a service.

That’s fair enough, so they can go to the court, state the case is:
We originally had been supplying our customers with services directly, now we get them from someone else, and they pay us for copper network access, however, before we were profiting more (less?), and would like to be justly compensated.

To which, depending on the facts involved, the response would be:

You had to pay to provide services to the customers as well, this would include power, network costs, etc, so we take those from the revenue originally, and subtract any costs, find out the real profit you were making, find the difference, and reimburse the difference.

There’s no reasonable way they can prove any loss or gain of business, as the FTTN network adds a dynamic element, if not by force, everyone decided to move their services, Telstra would have a hard time proving otherwise.

So, it all essentially comes down to that really, the minor difference in the profit made. And if the case is valid and warranted, they could then basically get the $xxx million dollars in reimbursement, and case closed.

It’s not going to be billions, they can’t prove the future, and if they could, they’d have to prove further that costs come down in the futuristic network model.

On the other hand, if the government still didn’t want to risk paying a few hundred million in compo to Telstra, they could legislate against cases of that nature, the laws change, and viola, they are screwed over anyway.

Sure, we wouldn’t want to legislate against that sort of activity for everyone.

But Telstra, and Kevin Morgan are both kidding themselves if they think they are getting anywhere near that much in compensation.

They seem to have the mindset that everything is going to be taken off them, when in reality, nothing is changing hands, just the copper tails that connect to SOME customers will be RENTED at a FAIR RATE OF RETURN, and Telstra will need to pay the company paying them to supply the linking service to the customer.

That’s not much to complain about if you ask me, but if Telstra want that few million in cash, go take it, shut up, and let someone else get on with the job!

OH, and Sydney, I read your comment on Now We Are Talking, you stated:

Good debate folks makes interesting reading. My idea on the situation is slightly different. I think the problem started years ago when Sol Trujillo arrived from the U.S.A. Sol is a tough straight shooting businessman, who tells it like it is, and is used to dealing with adults who are sensible, fair and honest in debate and assessment.

When Sol (and Phil) told the Australian public the truth concerning the state of Telstra on their arrival in Australia they were ordered to shut up by the Howard Government, who intended to flog Telstra to the Australian people, and do what the Government demanded. Sol (and Phil) declined and thereby was the basis of all the trouble. A Government who thought they were born to rule and were determined to teach Telstra a lesson. A Government so vindictive that they are willing to give 1 billion dollars of Australian taxpayers money to a foreign Government to get back at Telstra.

It seems at the moment that Mr. Howard may have been too smart by half and perhaps has placed the noose around his own neck (politically) and may have caused a disaster for his Party.

The question is what will Mr. Rudd and Labor do to right this wrong that Howard has done to Telstra?

Jason T talks about competition, let us look at what competition really is. To me, competition is where competitors compete to gain advantage over opponents and to gain the prominent position in any situation. Actually, Jason T is anti-competition as it is his desire to regulate Telstra to the advantage of opponents and in fact to create a false market that, in the long term, will be harmful to all telcom consumers in Australia.

I did write a reply to that, but they haven’t published it yet, and they have a habit of squishing content that is meaningful to the discussion so it’s not very readable.

I thought, I’d take some time and reply here for you.

You know the only thing the Howard government have done wrong to Telstra is the selling of Telstra without first splitting it up and setting up the right competition legislations.

That’s a big mistake, but not big enough to change my vote (it would have been if they hadn’t announced OPEL).

Competition to me means two or more going head to head in a violent blood fight to the finish, and the fighter with the best support will generally win, assuming no cheating of course.

And when I say cheating, Telstra did cheat. They were government owned and had the government support to build their entire network, that’s an advantage no other competitor will have, and that’s why competition in this country is in many areas, except a heap of Metro places, is Artificial competition. It’s competition, it’s just.. Telstra in disguise.

Real competition does exist in Australia though.

It exists with the cable networks.
It exists with competitiors rolling out ADSL2+ in metro exchanges and servicing customers using LSS and ULL.

It doesn’t exist in rural Australia.

I’m very pro competition Sydney. The sooner Telstra can stop whinging about regulation and start whinging about massive customer losses, the better off we all will be.

I’m only in support of regulating Telstra in support of competition where Telstra has a monopoly, ie. My Exchange, which is only got backhaul from Telstra Wholesale, and that means its expensive for any supplier to setup an ADSL2+ service from my exchange.

That’s where regulations should target, they should push the prices of Telstra’s backhaul down, in support of getting competition in those areas. Not down too far that no one invests in backhaul, but to a point where setting up a DSLAM network is viable, but not at the cheap side.

Regulation basically wants to force competition by doing a few things.

1. Giving an entry to the market (this doesn’t exist in my exchange).
2. Making it viable to install your own infrastructure instead of just finding it cheap to bunk on someone elses.

In metro areas, regulations have worked very well to encourage competition, in some exchanges, you can get ADSL2+ services from something like 7 providers as I understand it. That’s a lot of people FIGHTING for your business, it basically falls to a price fight.

The same cannot be said in Regional Areas, and that’s where I support regulation. I disagree at this point in time with regulations in metro areas to some extent, where competitors have already invested into exchanges (hint: 7 providers in one exchange), that’s a fair call, and should generally speaking, be allowed to be deregulated.

Regulations need to increase in Regional Australia where it’s not possible to invest due to the big roadblock, Telstra Wholesale Backhaul prices.

I wonder if Bigpond pay the same rates for backhaul that Telstra Wholesale use to force competitors to remain out of the area?

What do you think Sydney? Is this fair? Is this a way of helping themselves so they can lose regulations? Is this encouraging competition? No.

So, Telstra are forcing competition out of the area, No one is investing in backhaul, the ACCC are doing nothing about this issue.

We at the LJTY are pretty stranded until OPEL comes in, or someone coughs up the dough to connect a cable from here to the nearest place someone else has backhaul, or Agile sets up one of their microwave wireless networks.

Sydney, maybe we should swap places. You don’t seem to recognise the situation that exists with Telstra and its conflict of interest in being retail, wholesale and infrastructure owner.

Please try to..

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