Heres a little article that i found on the telstra intranet at work yeaterday a very revealing insight into the operation of the main competition watch dog. it realy makes it seem like that ACCC just doesnt want Australia to have a decent IP infrastructure.
A cruel hoax by SingTel-Optus has forced millions of Australian small businesses and families to wait longer than necessary for high-speed fibre broadband. For the past year, governments have delayed a fibre build-out because a consortium led by SingTel-Optus claimed it could improve on Telstra's plan. The consortium, known as G9, this week appeared to fold its cards.
SingTel-Optus and its partners never had the plans, technology, or staff to build the network. Their failed proposal was just a bluff designed to create an illusion of competition so the Government and Telstra could not get down to the tough business of building the new network. The G9 hoped the delay would prolong its right to rent from Telstra – at discount prices set by the ACCC – the old-fashioned copper networks that fibre will replace. In other words, SingTel and partners used the G9 ploy to perpetuate a commercial advantage gifted by the CAC, even if it meant setting back the nation's hopes and needs for high-speed broadband.
The G9's so-called 'plan' was stillborn. It offered no improvement on today’s technology. It was governed by an investment-blocking committee that would leave Australia in a broadband backwater. It promised misleading prices that would dramatically increase just three years into the life of the network. Incredibly, the G9’s plan was conditional on the Government granting it a legislative monopoly and agreeing to dismantle Telstra's network. Telstra had long pointed to these problems with the G9 ‘plan’, but few paid heed.
By contrast, Telstra's high-speed broadband plan was buttressed by detailed technology plans, deployment schedules, staffing arrangements, and funding already approved by the company's board. Telstra didn't require a monopoly or the dismantling of competing networks. Telstra offered an open-access fibre network, available to competitors on the same terms and conditions given to its own business units. Importantly, Telstra's plan also included a 13-year guarantee on wholesale prices.
The ACCC and their allies in the bureaucracy were long-time cheerleaders for the G9. The ACCC Chairman, Graeme Samuel, sent the clear message that he preferred the SingTel-Optus-led alternative. In an attempt to bully Telstra into backing down on elements of its plan, he shamelessly set in train a legal process to help Optus achieve its objective of dismantling Australia’s only nation-wide telecommunications network and transferring the nation’s critical infrastructure to a foreign-dominated consortium.
Despite its complicity in the development of the G9's proposal, the ACCC ultimately rejected it. That's because the G9 could not deliver the goods, despite the support of the former government and the ACCC.
If the G9 returns with new undertakings, it will have to revisit its former requirements like price increases, legislated monopolies, and the vandalism of Telstra's network. In addition, of course, it will need a technology plan, deployment plan, staffing plan and financial operating plan to make it happen.
It is not surprising that SingTel-Optus and the G9 have failed to deliver a viable plan to broadband Australia. SingTel and its partner Elders, through another consortium known as OPEL, have failed also to deliver their much-hyped regional wireless broadband network. Despite a one billion dollar gift of taxpayers' money, Australians have waited patiently for signs of life in OPEL. There are none. All vital signs are flat. It appears that OPEL is another example of the dog catching the bus.
OPEL and the G9 are utter policy failures by the former government and the ACCC and cruel hoaxes on taxpayers and Australian consumers. SingTel Optus fiddles while Australia falls further behind.
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ACCC shields SingTel Optus from cable investment
25 January 2008
By Tony Warren
Executive Director Regulatory Affairs, Telstra
It’s official. The ACCC doesn’t believe Optus’ fixed networks are up to par with Telstra’s – and apparently, Optus agrees.
In some extraordinary statements the ACCC has said, in effect, that Optus must retain regulated access to Telstra’s network – even where Optus has its own – because Optus can’t provide a comparable range or quality of services.
Optus HFC not equivalent?
In a recent statementi, the ACCC said that Optus would have to upgrade its HFC network before it could provide customers with a quality of service equivalent to Telstra’s networkii.
Instead of encouraging Optus to upgrade its “lazy” cable network to provide the range of telephone features residential and business customers expect, the ACCC is killing off the incentive to improve the investment Optus already has in the ground.
Optus freely admits that it “may not be commercially attractive to provide telephony services via its HFC (hybrid fibre coaxial cable) network” iii– and how could it be when the alternative is cheap access to Telstra’s fully-featured copper network, courtesy of the ACCC?
In setting new, ever lower prices for access to Telstra’s copper lines, the ACCC said it didn’t consider the Optus HFC network provided “a strong competitive constraint on Telstra” because some Optus HFC services aren’t a “close substitute”iv for voice and broadband offered by Optus using Telstra’s copper lines.
If the ACCC really believes the Optus HFC is such a poor substitute for the Telstra network, will it require Optus to inform potential customers of this fact?
Optus could easily upgrade its HFC. Telstra has provided expert evidencev in a related submission that Optus’ HFC network could do the very things Optus says it can’t: IP telephony, retail business services, plus wholesale business and residential services.
Mr Michael G Harris, a former VP of engineering and chief technical officer for cable company Century Communications, outlined the upgrades which could be made to Optus’ HFC network to provide the full suite of comparable services available over Telstra’s copper, and even an estimate of costs!
But why would Optus make any investment when it continues to pick from a menu of regulated Telstra services, shamelessly admitting the deficiencies of its own offerings as some kind of excuse?
Optus’ services over ULL not good enough for business?
Optus – despite having a network based on access to Telstra’s unconditioned local loop (ULL) in addition to HFC – still wants regulated access to Telstra’s direct lines via wholesale arrangements. This is because the second-rate service it offers residential customers over ULL isn’t good enough for business customers.
Optus has argued it needs access to Telstra wholesale lines to serve valuable corporate and government customers who require “complex features (that) cannot be provided over Optus consumer grade infrastructure (including DSLAM infrastructure)”vi.
It is not that Optus couldn’t upgrade its networks to provide these business-grade services, but it would rather demand access to a Telstra service to minimise its own costs.
With the ACCC turning itself inside out to justify below-cost access to Telstra’s services, will we ever see a competitor offer network services that are up to scratch?
The ACCC is completely undermining the main public policy imperative in telecommunications – the creation of strong competition based on competitive infrastructure investment.
i Unconditioned local loop service access dispute between Telstra Corporation Limited and Primus Communications Limited: Statement of reasons for final determination (“Reasons”).
(http://www.accc.gov.au, PDF - 594KB) December 2007
ii Para 838 of the Reasons
iii Para 831 of the Reasons
iv Para 838 of the Reasons
v Expert Report – Use of HFC to deliver broadband services. Michael G Harris (http://www.accc.gov.au, PDF - 589KB) 12 December 2007
vi Letter: Impact of WLR / LCS Exemptions in the Corporate and Government Market Segment (http://www.accc.gov.au, PDF - 68KB) 10 January 2008.
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Academic dreaming: A prescription for Australia's broadband woes?
19 December 2007
In an opinion piece in yesterday's Australian newspaper, Melbourne Business School academic Professor Paul Kerin claims there is a better way to get broadband in Australia – strengthen the ACCC’s access pricing powers and force Telstra to divest at least its copper and HFC networks.
Professor Kerin writes Telstra’s current "structure gives its both the incentive and ability (reinforced by the access regime) to impede competition and dawdle on new technologies / products.”
He writes “Telstra’s behaviour is the real problem. That’s what we need to fix.”
Is Telstra Australia's most evil corporate citizen? Here's what we say…
Academic dreaming
By Rod Bruem*
There's an old and unfair saying that suggests those who are capable of achieving something in life go ahead and do it, the rest become teachers.
The saying came to mind when I read the bizarre commentary from Melbourne Business School "strategy teacher" Professor Paul Kerin and his prescription for fixing Australia's broadband woes.
While I've never met Professor Kerin and wouldn't presume to question his professional capabilities, I would admit to having serious doubts about his objectivity when I read his views on Telstra.
The professor describes Telstra as one of Australia's "worst corporate citizens" alongside the wheat exporter AWB - a corrupt company found to have paid illegal bribes to Sadam Hussein. Really Professor? Don't you think you're being just a little over the top?
We do at least agree on one thing, that is Australia suffers from a lack of investment in broadband infrastructure.
We disagree strongly on the solution. Professor Kerin suggests breaking up the only company that has been seriously investing in Australian telecommunications for more than a century.
The Professor fails to explain exactly where he'd run the knife through the network and who would compensate Telstra's shareholders for wrecking their investment. Contrary to what some people like to think, telecommunications networks are intelligent systems not "dumb" pieces of infrastructure like railway tracks or gas pipelines.
The only country that has seriously looked at some form of network separation that goes beyond what we already have in Australia is Great Britain, and two years on they are still trying to figure out how to make the system work. Of greater concern is the fact that there is no sign of that country getting a next generation FTTN network any time soon. Remember too that the UK has more than 50 million people living in an area smaller than Victoria, so economically its in a much better proposition to begin with.
Commentators like Professor Kerin also seem to overlook just how complex a job it really is to build a 21st century national broadband network. Building and financing the project.... not to mention getting the workforce together, the trucks and equipment.... All of this takes incredible planning and expertise. Telstra has the plan ready to go and the people who can deliver. Without an integrated Telstra, it just would not happen.
You only have to look at events in recent weeks to see how Telstra leads competition - and when it does the others follow.
Case 1)
Both SingTel and Vodafone have announced massive upgrades to their 3G mobile networks. Why? Because Telstra invested and is now thrashing its rivals in the marketplace. The competitors now have to invest in order to try to keep up. SingTel's first preference was to lobby the Federal Government to get cheap access to Telstra's Next G™ network. When the Government refused, SingTel was reluctantly forced to open its cheque book. The ultimate result… consumers benefit from real competition that you only get when there is access to competing infrastructure.
Case 2)
Telstra invested in an upgrade of its HFC cable network to offer faster speeds up to 30 mega bits per second to homes in Melbourne and Sydney. Having virtually mothballed its own HFC network several years ago, SingTel Optus has now belatedly decided to upgrade speeds on its HFC network to try to keep up with Telstra. Previously the company preferred to connect customers to Telstra's network using ADSL over the copper phone lines, because the ACCC regulation had set access prices below cost. (See Telstra media release, Optus to be forced to upgrade its "lazy" cable network, http://www.telstra.com.au).
There is a clear lesson here. Socialised access arrangements designed by academics and bureaucrats might sound good in theory, but in the real world consumers get real choice and real competition when companies invest and compete in the market place. We are seeing it in Australia, but only in the mobile sector where the ACCC hasn't interfered and stuffed things up with its regulations. We might even start to see it in cable if the regulator takes a step back and lets market forces behave the way they should.
Lumbering Telstra with more regulation or breaking it up would be a disaster for Australia and only see the country slip further backwards.
To have an experienced Professor advocating such a course of action is enough to make anyone wonder what students are learning in universities these days.
Read the article by Professor Kerin:
o Labor's broadband intentions are good, but its approach is misguided (http://www.theaustralian.news.com.au)
Paul Kerin, 18 December 2007
What do you think?
Have your say in our Broadband Australia discussion forum.
*Rod Bruem is a former editor of nowwearetalking.com.au
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Deutsche Telekom enters FTTN fray
11 September 2007
In what could be called little more than a "we'll-get-back-to-you" place-marker, Deutsche Telekom’s Asian office has expressed possible interest in building the fibre-to-the-node (FTTN) network for Australia.
In a 2-page submission to the Government’s FTTN Taskforce, Deutsche Telekom claims:
o sufficient expertise to do the job
o confidence they can get private sector funding
o agreement with the objectives of an open competitive FTTN network
BUT, they also express some reservations & provisos:
o they flagged the need for "targeted subsidies" if the desired coverage is outside "normal" economic models
o they are critical of the time frames for the process
o want clarity regarding the ongoing role of the ACCC
o want a regulated pricing model as a given
Telstra's CEO, Sol Trujillo, said he is unfazed by the prospect of competition from Deutsche Telekom.
Asked whether he was concerned about Deutsche Telekom's potential entry into the
fibre-optic fray, Mr Trujillo said: "The simple answer is, no."
"The economics of somebody building, somebody having networks, somebody not having people, not having trucks, not having all of that ... it is a challenge for anybody," he told reporters at the Merrill Lynch Australia investment conference in New York last week.
Ironically, in its German homeland Deutsche Telekom, Europe's biggest telco, has enjoyed the support of its government and forbearance from its regulator in order to roll-out FTTN. Even in the face of strident criticism from the European regulator, the German government has backed Deutsche Telekom and seems to understand the benefit of having a strong domestic telecommunications industry and the need to encourage local investment in fibre-based technologies.
In stark contrast, in Australia the Government and regulators put roadblocks in the way of the incumbent carrier's plans to invest in FTTN, rather than encourage it.
Deutsche Telekom's 2-page Submission to the FTTN Taskforce (http://www.dcita.gov.au)
Related media coverage:
o Deutsche Telekom makes three in broadband race (http://www.smh.com.au)
o Trujillo not fazed by European competition (http://www.news.com.au)
Tell us what you think...
about another foreign telco eying up the chance to own a significant piece of Australia’s telecommunications infrastructure.
Join in our Broadband Australia discussion forum.
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Wheels starting to fall off the G9 Trojan horse
3 September 2007
By Jeremy Mitchell
Political Editor
iiNet’s Managing Director, Michael Malone has let the cat out of the G9 bag by admitting that the G9 pricing methodology is so weak that it will need to increase its prices due to money market changes. If their prices need to go up as a result of a lift in the base rates by a few percentage points, you have to wonder what will happen once they started building the network.
So even before the starting gun has been fired, the G9 is already changing the betting stakes.
Adding to their woes, this week the G9 scheme has been found wanting in other respects. In a detailed submission to the ACCC Telstra outlined the many technical flaws in their scheme. This view is supported by another submission by independent backhaul and peering specialist, Pipe Networks, which publicly stated that G9 was a” retrograde step” which didn’t take into account the impending explosion of bandwidth hungry services.
The G9 have shown that all they want to do is spoil the process - their scheme is clearly not designed to deliver FTTN but is intended to wreck the only real chance Australia has of getting FTTN.
The fact that the Government has called a 'tender process' to genuinely evaluate this bogus scheme is a travesty. The worry is, that the Taskforce and Government will take the G9 scheme seriously and Australia is faced with the real possibility of waking up one day with the G9 in control of the nation’s telecommunications network.
You only have to look at Broadband Connect’s WiMax to see that the Government has already shown it is capable of choosing the wrong technology.
The admission of an increase of pricing for the G9 scheme must also be cause for embarrassment in the ACCC who have thrown their support behind the scheme, The ACCC Chairman has taken the unprecedented step of publicly supporting and favouring the G9 proposal, so much so that his words of support where used in G9 advertising.
Unlike the G9, Telstra has said it will lock in its FTTN pricing for 13 years.
Unlike the G9, Telstra stands ready to start building a fibre network in 48 hours.
And unlike the G9, Telstra has the capability to do the job, - we have had a detailed high-speed broadband plan on the table over two years.
The G9 have shown once again that Telstra is the only company that has the plans, experience, and personal to build a high-speed broadband network for Australia.
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Does SingTel speak for the Howard Government?
23 July 2007
Throughout the life of the Howard Government - the Singapore Government, through it's Australian subsidiary SingTel Optus, has been a major donor to the Liberal Party of Australia.
Every year SingTel Optus has donated tens of thousands of dollars to the Liberal Party - in stark contrast to Telstra which has a long standing policy of not making political donations.
Now it appears SingTel is being more than repaid for its generosity.
First came the Howard Government's decision to donate almost a billion dollars back to Singapore through the "Broadband Connect" program. The Government's decision to enter secret negotiations with SingTel has already been criticised by the Auditor General. Within days SingTel announced it would invest the same amount of money being given to it by the Howard Government to buy a share in a new mobile phone carrier in Pakistan. All just a coincidence of course.
Meanwhile hundreds of small towns and rural communities around Australia are missing out on high speed broadband, because SingTel Optus prefers to invest in Pakistan and refuses to use its Australian subsidy to provide coverage in towns other than those where Telstra has already invested in infrastructure.
Next came the Government decision to fund a "Broadband Connect" website, which was skewed to promote SingTel Optus and leave Telstra out altogether. It pretended SingTel Optus was the major provider of broadband in Australia, as if the company owned by 1.6 million mums and dads in Australia simply didn't exist.
As if this sorry record wasn't bad enough, now it seems obvious that SingTel Optus is dictating policy to the Howard Government.
The Sydney Morning Herald reported (21 July 2007) that if Telstra decided not to invest in a new Fibre network, the company would be further penalised by the Howard Government.
The warning came from the SingTel Optus regulatory chief Paul Fletcher - himself an aspiring Liberal Party politician, in a briefing to journalists.
"Mr Fletcher, who returned to work this week after missing out on Liberal Party pre-selection for a federal seat, issued a veiled warning to Telstra that it faced adverse regulatory changes if it did not take part in the tender process," The Sydney Morning Herald reported (21 July 2007).
Clearly SingTel is now so close to Minister Coonan and her colleagues in Canberra, its company officials feel they can speak for the Government.
Australians should hope for change very soon that puts the interests of Australians first, rather than bending over backwards to appease Singapore.
Related items:
o Eaten by Singapore
o Taxpayer money to help Singapore Airlines compete with Qantas?
Tell us what you think
Have your say in our Broadband Australia discussion forum.
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When you want a job done, do it yourself
18 July 2007
By Brent Hooley
Business editor nowwearetalking
Luckily for hundreds of communities across regional Australia, Telstra does the job itself.
In recent months mother nature has wreaked havoc in Western Australia, South Australia, New South Wales and Queensland; and the clean-up is continuing in Victoria following floods in the Gippsland region.
Cyclones, storms, wind and heavy rains have pounded hundreds of regional communities, disrupting vital services, including telecommunications services.
Only one company, however, has the depth of experience, resources and expertise to quickly and effectively mobilise to respond to customers in their hour of need. Telstra has a strong history of working with communities and during these difficult times can be depended on to assist. The others are nowhere to be seen.
Tireless Telstra technicians brave the elements, and have even rescued others in danger, as they repair disrupted services for their neighbours, friends and relatives.
If affected communities waited for Singtel Optus, Primus, AAPT or any other telco to restore services they would be still waiting. Or as Telstra Public Policy and Communications chief Phil Burgess says, “The only time you see a Singtel Optus van in regional Australia, it’s either lost or stolen.”
Telstra works with local authorities to provide emergency mobile phones, fixed lines and broadband services at critical evacuation centres. It establishes dedicated customer service teams and a Flood Assistance Hotline to assist customers needing to restore their services.
Staggeringly the Federal Government has awarded a Singtel Optus led consortium to deliver broadband services in the bush. They’ll need some maps.
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