Telstra? Our Only Hope!
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COMMENT: Telstra’s announcement of its latest submission to the ACCC strategic review of the regulation of fixed network services demonstrates the Telco will say anything to get its own way.

In one of the more hypocritical statements to come out of the Telco in recent weeks Dr Tony Warren, Telstra’s General Manager of Regulatory Affairs said: “What the country needs is updated, better targeted regulation that protects investment in new services from being strangled. Australia needs reforms that continue to give competitors regulated access to infrastructure where there is little or no competing infrastructure, while also delivering the fruits of competitive investment in innovative services to Australian consumers and businesses.”

Competitive infrastructure? Innovative? Sounds like a contradiction here somewhere.

A closer look at this latest Telstra ‘po- shot’ at the regulatory framework raises a contradiction in light of the telco’s refusal to roll-out a fibre-to-the-node-network that would bring Australia’s telecommunications infrastructure out of the 1980’s and into the new Millennium.

Warren seeks targeted regulation that would protect Telstra’s investment in new services (FTTN). Specifically he asks for reforms that would continue to regulate “access to infrastructure where there is little or no competing infrastructure”. Here he means it’s okay to regulate the copper network that is currently the backbone of last mile connectivity.

This is already a tightly regulated area thanks to the unbundled local loop legislation. As we’ve already pointed out in our rant two weeks ago Why Telstra Will Make The Local Loop Worthless, Telstra has all but given up on this asset.

Since there is no viable infrastructure to deliver essential services such as the diminishing fixed line PSTN and the booming DSL Internet Access, this part of the network must logically be made available to competitors.

But surely if Telstra were to roll-out fibre closer to Australia’s homes and businesses, such a network would also have “little or no competing infrastructure” which Warren says should be open to competitive access.

So why is the unique legacy infrastructure different from an equally unique FTTN infrastructure? There’s certainly no news of any other carrier planning to roll-out fibre to the end of my street. And it’s highly unlikely any other existing Australian carrier or prospective entrant from overseas could ever contemplate such a prohibitively expensive deployment – especially if there was going to be a competing Telstra Network.

Australia’s metropolitan population could barely justify the investment in one such high-speed network; two would be out of the question.

Far from the regulatory framework being “stuck in the last century” as Warren protests, it is our telecommunications network that is stuck in the last millennium and with only one company making nearly all of the profits in the telecommunications industry it is hard to see any competitor having the wherewithal to do anything about it.

Warren says that the current regulations were written for a time when there were only three telecommunications carriers and they now need to be updated now that there are 153 carriers and hundreds of ISP.

“Today, there are alternative networks available for 84% of the 1.6 million phone lines in Sydney, and the situation is similar in other capitals,” he said in a statement that is likely to inflame ‘the bush’.

Warren’s rhetoric aside, Telstra is by far the dominant telecommunications provider in this country. This privileged position comes not by virtue of its service, price or quality, nor from its product innovation or customer service, but from the massive lead in customer numbers and infrastructure it obtained as a publicly owned monopoly carrier.

Though Telstra can complain about the loss of PSTN call revenues being savaged by fixed to mobile convergence, the reliance on copper network for DSL Internet access will ensure the majority of Australian households will maintain their fixed line. This assures Telstra of its monthly line rental charges in perpetuity, whether BigPond supplies the DSLAM access or not.

So the affront caused by Telstra’s recent increase in wholesale line rentals, its monumental increase this week of fixed line connection pricing both serve to demonstrate what we said two weeks ago. Telstra will milk the legacy infrastructure for all its worth and it will complain, threaten and whine to try to avoid having to share access to an upgraded network. But if it doesn’t build one, who will?

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