Broadband battle intensifies

Broadband battle intensifies

The war between Telstra and the Australian Competition and Communications Commission (ACCC) has escalated and there's still no solid vision of a high-speed Australian broadband network or pricing plan.

On the day before Australia's competition watchdog launched a public inquiry over the details of a new Fibre to the Node (FttN) network, ACCC chairman Graeme Samuel said Telstra was moving "against policies that seek to ensure world-class telecommunications services at a fair price to consumers" -- calling the telco "a monopoly designed to beggar the competition".

The ACCC's public inquiry aims to flesh out the access details to the proposed high-speed FttN network, providing a clear set of rules that allows competitors to gain access to any network infrastructure at fair prices, and may pressure Telstra into revealing its wholesale pricing structure for the new network.

The move by the ACCC comes as a bulwark to any potential backroom talks between Telstra and the Howard Government, a situation that initially arose in response to the ALP leader, Kevin Rudd's promised national broadband network, if elected.

Claims by Telstra that a tentative deal had been made for a Federal Government-backed Telstra rollout were dismissed by communications minister Helen Coonan, despite weeks of private meetings with the telco discussing the Government's need to counter Labor's proposal. In an ACCC release, Graeme Samuel opposed the talks saying, "The future of Australian telecommunications cannot be decided behind closed doors, bypassing scrutiny and through secret deals."

Both Telstra and its competition -- the consortium headed by Optus known as G9 -- have proposed plans for the high-speed network, though only the latter had submitted details to the ACCC at the time of writing.

Telstra also recently lost its appeal over pricing of its existing copper network. Samuel said the tribunal's decision that Telstra's pricing structure was unreasonable "makes the need for Telstra to release its FttN costing for public examination even more pressing." Telstra's refusal to disclose the details of its wholesale pricing structure lies at the heart of the issue. The public inquiry, which may force Telstra to make its deal transparent, became a reality subsequent to a formal request to the ACCC by G9 to amend the Unconditioned Local Loop Service (ULLS) description. The inquiry hopes to provide a clear and detailed description of wholesale access to the network's infrastructure and a fair arbitrated price regulation of that access. The initial findings are expected to be made public by late July 2007.

The battle -- which initially began between the ACCC and Telstra -- has escalated into a mess of regulatory bullying involving G9 as well as both political parties, and has even become a public relations exercise to the extent of using full-page newspaper advertisements and broadcasts at AFL matches.

The clash overshadows another controversial topic regarding the weak state of Australia's broadband infrastructure, which has come into debate due to differences in opinion over the credibility of survey statistics determining Australia's global broadband ranking.

Coonan has rejected the credibility of the OECD (Organisation for Economic Co-operation and Development) analysis results, which claims Australia's worldwide ranking has moved from 17th to 16th place. Coonan cited a report by the telecommunications analysts Market Clarity stating that "Under no measure does the OECD's 16th position assessment stack up".

If the Government is to be believed then Australia's ranking could be as high as sixth, while the ALP's 'doomsday' claim that Australia is ranked as low as 25th in the world for broadband speeds is equally drastic and misleading. Either way there is little movement forward.

Telstra recently hosted a poll on its Web site asking "who do you think is blocking high-speed broadband in Australia?" with the following options to choose from: the Government, ACCC, G9, Don't know and of course Telstra. The telco was forced to remove the poll after it believed to be 'rorted'. The results at the time suggested 97.1 per cent of respondees voted for Telstra, but a post by the company's public affairs manager Rob Bruem on Telstra's Web site (www.nowwearetalking.com.au) states the result was skewed by an 'automated program' continually voting against the Telstra option.

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