Telstra split clears way for the NBN

FULL-SCALE rollout of the national broadband network will start within months, as telcos are already advertising prices from $30 a month for basic services and up to $165 for super-fast connections.

The final piece of the NBN's regulatory puzzle fell into place yesterday, after the government secured a decision from the competition regulator designed to curb Telstra's dominance of fixed telecommunications. It is also the final hurdle to Telstra signing a deal with NBN Co.

By approving Telstra's plan to split its fixed wholesale and retail arms, the Australian Competition and Consumer Commission has cleared the way for NBN Co and Telstra to finalise an infrastructure-sharing agreement within weeks.

Under the deal, Telstra will gradually shut down its copper wire network as it transfers customers to the NBN. It stands to receive about $11 billion, at today's values, from NBN Co over 30 years.

Any move by the Coalition to shut down or substantially alter the NBN would now involve negotiating a new deal with Telstra and unwinding the complex regulatory process that finished yesterday.

The separation means Telstra will no longer own the infrastructure that it also uses to compete against other telcos at a retail level.

Broadband Minister Stephen Conroy said splitting Telstra was the ''holy grail'' of telecommunications reforms. Structural separation, as the reform is known, would finally ensure a ''level playing field'' and address a long-standing policy failure. ''This is a mistake that was made 20 years ago,'' he said, referring to the Howard government's initial decision not to split Telstra when privatising it.

He said scrapping the NBN - as promised by the opposition - would hold back competition because Telstra would no longer have to structurally separate.

Opposition communications spokesman Malcolm Turnbull said the Coalition supported Telstra's structural separation and upgrading broadband across Australia. But the Coalition would not release policy details until closer to the election.

Separation will not be complete until NBN Co finishes building its fibre-optic cable to replace Telstra's copper, which will be decommissioned except in rural and remote areas. Construction is expected to take 10 years and cost $36 billion plus the payments to Telstra.

ACCC chairman Rod Sims said the separation was a ''significant milestone in the structural reform'' of the telco industry. ''More effective competition in telecommunications markets will result in improved service offerings to consumers.''

The go-ahead from the regulator came a day after Telstra unveiled prices it plans to charge people for access to the new network.

Its initial offerings appear significantly more expensive than those of rivals. For example, Telstra's cheapest monthly phone and internet plan will be $80, compared with Optus' entry level $65 and Exetel's $35.
Telstra is also relatively expensive at the premium end, charging $150 for 500Gb of data delivered at the high speed of 100Mbps. iiNet, by contrast, will charge $110 for twice as much data delivered at the same speed. iiNet's price, however, does not include a modem, for which it will charge an extra $10 monthly.

Read more: http://www.theage.com.au/opinion/political-news/telstra-split-clears-way-for-the-nbn-20120228-1u0y5.html#ixzz1nqIhDFFd

Telstra Releases NBN Pricing Plans

The move comes after the nation's largest telco signed a wholesale service agreement with NBN Co, the government-funded company charged with building and running the national broadband network, at the weekend.

The plans, announced on Monday, have the same pricing and download allowance for specific download speeds as Telstra's ADSL or cable internet plans.

Telstra executive director of customer service Peter Jamieson said the decision to offer a uniform suite of broadband products was designed to make things simpler for customers.

"Whilst having options is good, too many options becomes confusing," Mr Jamieson said.

Entry level NBN plans starts at $49.95 a month for 50 gigabytes (GB) of data delivered with a download speed of 25 megabits per second (Mbps), rising to $89.95 for 500 GB.

For those who wish to have a download speed of 100Mbps, plans start from $59.95 a month for 50 GB of data, to $99.95 for 500 GB.

The release of Telstra's NBN plans also coincided with an update of the telco's broadband retail offering more generally, with new bundled plans featuring more generous download allowances and inclusions.

Telstra chief customer officer Gordon Ballantyne said a dedicated call centre had been set up to manage customer inquiries, while 5,000 technicians were on standby to help customers connect to the new service.

The NBN plans will be available to those living in the five Australian mainland first release NBN sites - Armidale and Kiama Downs (NSW), Townsville (Queensland), Brunswick (Victoria) and Willunga (South Australia).

Other internet service providers currently offering NBN retail internet plans included Optus and iinet.

While it was possible to deliver voice services over parts of the NBN, Mr Jamieson said customers would continue to receive their home phone service over Telstra's copper network.

"As the technology changes occur over the next 12 to 18 months, we will make that transition to a fibre service for their voice," Mr Jamieson said.

NBN Co planned to roll out fibre-optic cable to deliver high-speed broadband services to 93 per cent of Australia's 13 million homes, schools and businesses by 2021.

Telstra closed down three cents at $3.23.

Telstra Internet Outage Affects Millions

Millions of Telstra customers across Australia were left without internet access for 40 minutes this afternoon due to an internet outage.

A spokesman for the telco told ninemsn the outage, which began at 1:50pm (AEST) and ended at 2:30pm (AEST), had affected Telstra customers nationally for mobile and fixed broadband.

"We do not know the cause, we are investigating that now," the spokesman Craig Middleton said.

Hundreds of customers turned to Twitter to vent their frustration over the outage.

"Nice work blowing the internet there Telstra," one user, switch_mullet, wrote.

"Hey #Telstra, have you tried turning it off and back on again?" another angry customer tweeted.

Telstra has three million Big Pond customers nationally.

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.melbourne, .sydney and .victoria are go, .nsw a maybe

The NSW and Victorian governments have selected ARI Registry Services to prepare their application for new top-level domains (TLDs): .melbourne, .sydney and .victoria.

The two state governments released a joint tender in October, seeking a registry operator to manage the application to the Internet Corporation for Assigned Names and Numbers (ICANN), which governs the granting of new TLDs.

The NSW government is still determining whether it will apply for a .nsw domain, which has raised as a possibility in the original tender. ARI Registry Services CEO, Adrian Kinderis, said that ICANN's rules governing the new generic TLDs (gTLDs) mean that the state government may not be guaranteed to be granted .nsw.

"We're working through some of those issues so it's certainly not ruled out," Kinderis said. "We'd love to have it in the mix obviously from a registry perspective, but that is yet to be ratified. So we're working through that issue at the moment to make sure the money is spent wisely if indeed they do go for the application and that they're giving themselves a good chance of securing it."

Kinderis said he was disappointed that other Australian cities and governments had not taken advantage of ICANN's opening up of new gTLDs. "I don't believe anyone else is coming forward. it's really disappointing because this is an amazing opportunity and for places the Gold Coast and Brisbane which really work hard on promoting themselves internationally as destinations, we would have thought this would have been a no-brainer."

Kinderis said that it's not too late for other governments to apply for gTLDs despite the 12 April deadline for filing applications with ICANN. "I don't think it's too late [but] the message needs to be 'mobilise now'."

ICANN is committed to opening up a second round of gTLD registrations, but Kinderis said he didn't anticipate this would be for another three years at least.

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NBN Broadband Satellites Please Farmers

The federal government's plan to buy two satellites to provide high-speed broadband services to the nation's most remote areas has pleased farmers, but the opposition says it's too costly.

Labor on Wednesday announced a $620 million deal between NBN Co, the government-owned enterprise rolling out the national broadband network (NBN), and US firm Loral Space and Communications to make the Ka-band satellites.

When they are launched in 2015, around 200,000 homes and businesses in the remotest regions will have access to internet download speeds similar to those currently available in urban centres.

"We won't be leaving those Australians who live in the remotest parts of the nation behind," Prime Minister Julia Gillard told reporters in Canberra.

Under the $35.9 billion NBN project, fibre-optic cable delivering high-speed broadband services will be rolled out to 93 per cent of Australia's 13 million homes, schools and businesses by 2021.

Fixed wireless technology will provide high-speed internet to four per cent of premises, and the remaining three per cent will be supplied by the two satellites to remote areas.

Communications Minister Stephen Conroy said the satellites would give users affordable world-class broadband connections to be paid for by cross-subsidies built into the NBN plan.

"It ensures remote families and business pay the same entry-level wholesale price for services in the city," the senator said.

"Using these satellites, rural businesses can make it easier to expand in national and international markets."

The new satellites would be launched separately, the first one by March 2015 and the second one six months later.

The National Farmers' Federation said the plan was a "very positive" development for rural communications.

"We're looking forward to the day when all Australians have equal access to telecommunications - and we will work with government to ensure that the commitment made today is upheld and delivered," NFF president Jock Laurie said in a statement.

But opposition communications spokesman Malcolm Turnbull described the plan as expensive, comparing it to buying a top-of-the-line luxury car when it wasn't needed.

"Don't buy yourself a Camry, a Falcon - buy yourself a Rolls-Royce, a Bentley," he told reporters.

"Nothing but the best will do, nothing but the most expensive will do."

Mr Turnbull said the telecommunications industry had told him there was enough capacity on existing and scheduled-to-be-launched satellites to provide broadband services to rural and remote Australia.

He also queried why the existing interim satellite service could not be upgraded to a permanent one.

Senator Conroy dismissed reports an Australian company had missed out on the contract, saying no local company had the capacity to build the satellites, which will be made in the US.

The hardware will deliver initial peak speeds of 12 megabytes per second downloading and one megabyte a second uploading.

"It will be possible for retail service providers to offer services to homes and businesses in the satellite footprint that are as good or better than the services many city people currently experience," NBN Co chief Mike Quigley said.

The satellite contract is part of a total investment of about $2 billion over 15 years required to deliver the NBN long-term satellite service.

The opposition is opposed to the existing NBN plan and prefers a mix of technologies to achieve its own version.

But Mr Turnbull acknowledged contracts such as the satellite deal could be hard to cancel if the coalition wins the next election in 2013.

"They are putting contracts in place and we may have to live with it," Mr Turnbull said.

The NBN is due to be completed by 2021.

Peak provider aspiring to grow iiNet's reach

CLIMBING a wall of ice is one way of getting a break from the stress of running Australia's fastest-growing internet service provider, iiNet chief executive Michael Malone says.

"When you are halfway up an ice wall, suspended by crampons and axes, you are not thinking too much about work," he says.

Correction: NBN prices will not be higher - National Broadband Network

Analysis In several radio interviews this week, Shadow Communications Minister Malcolm Turnbull stated that the National Broadband Network project would cause consumer broadband prices to rise higher than those currently on the market. However, unfortunately this statement was factually incorrect.
To illustrate why, firstly, let’s go through what Turnbull said. According to transcripts available on Turnbull’s website, Turnbull said the following on 2GB in an interview with Ben Fordham on Wednesday:

” … Australians are waking up to how much this is going to cost them – not just as taxpayers but also it’s going to be more expensive as a consumer. You see this is the penny that hasn’t quite dropped. I think most people recognise that this is a very, very expensive project. But what they haven’t quite – the penny hasn’t quite fully dropped that this is going to be expensive in terms of the usage charges.”

“Now what’s going to happen here is because there is no competition, because this is a government monopoly and because they are spending so much money so they’re overcapitalising it, inevitably prices are going to be high.”

In a separate interview on the same day with 2UE’s Paul Murray, Turnbull said the following: “What we do know is that it’s going to cost a bomb, and it’s not going to make broadband access any cheaper. It’s going to make it more expensive.”

The Coalition has publicly stated its opinion that broadband prices will be higher under the NBN than the current ADSL-dominated broadband market repeatedly over the past six months. In September, Liberal MP Paul Fletcher stated that new NBN pricing released by iiNet at the time was higher than existing ADSL prices. And several months earlier, Turnbull stated that early pricing released by Internode for services on the NBN demonstrated the project would drive consumer broadband prices higher.

However, unfortunately the Coalition’s statements on this matter have been factually incorrect.

Almost all of Australia’s major ISPs released their first tranche of NBN pricing over the closing months of 2011, and in almost all cases, the prices are directly comparable to current pricing available over Telstra’s copper network (ADSL) or the HFC cable networks operated by Telstra and Optus.

To illustrate this fact, let’s examine the NBN prices of Optus, and compare them with the telco’s existing ADSL broadband prices. In naked DSL, Optus currently offers three plans, at $59.99, $69.99 and $79.99 monthly price points, and with 120GB, 150GB and 500GB of data quota included. And in naked NBN, Optus offers exactly the same price points and download quotas.

In bundled DSL, Optus currently offers five plans, at $79, $99, $109, $129 and $149 price points, and with 120GB, 500GB and terabyte download quotas, with varying amounts of call charges included — usually unlimited ‘standard’ local and national telephone calls within Australia, to both landlines and mobile phones.

And in bundled NBN, Optus offers many of the same price points and quotas — except sometimes they’re cheaper. The company’s $79 plan with 120 GB of data has morphed into a $64.94 plan (with, admittedly slightly lesser calling value). The $109 bundled plan with 500GB of data and unlimited calls has been copied straight across, and so has the $129 plan with a terabyte of data and unlimited calls.

It should be clear that virtually every single aspect of Optus’ NBN pricing plans represents better value than the telco’s current ADSL plans — and for exactly the same price. Optus doesn’t currently actively promote its HFC cable offering, so it’s tough to get an idea of what its prices are there. But if you compare its ADSL broadband plans to its NBN broadband plans, it seems clear that the plans are virtually identical.
It’s a similar case with Australia’s second-largest provider of ADSL broadband services, iiNet.

If you sign up for a naked DSL broadband plan through iiNet on its own network, (which comes with a bundled Internet telephony phone line), you’ll get a total of 100GB of quota (50GB on- and 50GB off-peak) for $69.95 per month. A similar plan with a bundled traditional telephone line and 100GB of on- and off-peak quota will cost you a total of $79.90 per month. If you’re not using iiNet’s DSLAM infrastructure in exchanges, you’ll pay a bit more — or the same, but with less download quota.

iiNet has two NBN plans which are comparable to this. The first comes with speeds of 12Mbps and 100GB of on- and off-peak quota, for $69.90 a month with an included Internet telephony line. Then iiNet has a 25Mbps plan with the same quota and telephone line for $74.90 a month. In short, like Optus, iiNet’s NBN plans are almost exactly the same as its ADSL plans. However, the NBN fibre technology is more reliable, has better guaranteed speeds and lower latency (responsiveness) than the current copper network.

Still not convinced? Let’s look at a another major provider, Internode, which was recently bought by iiNet, but whose prices so far remain independent. Internode currently offers a 300GB ADSL plan with a bundled telephone line for $99.90 a month. The top speeds possible on this plan are limited to 24Mbps, due to the limitations of the copper network, and most people will be getting less than 16Mbps. But for $94.95 a month, on Internode’s NBN plans, you can get a 100Mbps connection with the same 300GB monthly download quota, plus a bundled internet telephony line. Yup. A broadband plan four times faster, using more reliable technology, for $5 a month cheaper. That’s the NBN.

Now there are some anomalies in NBN pricing so far which may give the Coalition some basis for its pricing claims. For example, cut-rate ISP Exetel has priced its NBN plans significantly higher than its ADSL plans. In another example, when you get to really high-end plans — 100Mbps plans with a terabyte of download quota — pricing can shoot up in some cases.

However, these cases are not the rule.

Further analysis reveals that Exetel is still offering low-end NBN plans starting at $34.50, and its prices don’t start to get expensive compared with its ADSL pricing until you start to get to the point where you’re downloading more than 100GB of data per month. Exetel has acknowledged it’s not targeting big-downloading customers, so we’re not really surprised by its lack of competitiveness at the top end.

There is also the fact that Exetel has a miniscule share of Australia’s broadband market compared with Optus and iiNet, which are the second and third-largest providers of broadband in Australia. The prices offered by Optus, iiNet (and its subsidiary Internode) are, by definition, mainstream price points which the majority of Australians will be buying services at. And those prices are even more mundane and normal when you look at the mid-range plans (between $50 and $70 a month) bought by most Australians.

Two other major Australian broadband providers, Telstra and TPG, are yet to release NBN pricing. If both exhibit radically different pricing structures from Optus and iiNet, I will be more than happy to revisit this topic at that future date. However, I would not expect Telstra’s NBN pricing to be radically different from its current broadband pricing, which is already at the pricey end of the market. TPG’s pricing has historically been at the discount end of the market, and I would expect this trend to continue.

Lastly there is one other important fact which needs to be taken into account.

NBN Co has lodged a document with the Australian Competition and Consumer Commission called a ‘Special Access Undertaking’. This document, among many other commitments, states that NBN Co will maintain prices for its key wholesale prices at the current levels for five years. In addition, the company will limit future increases to be less than the rate of inflation for 30 years. In short, in real terms, NBN Co’s wholesale prices will remain fairly stable for the next 30 years.

Taking this binding commitment into account alongside the fact that current mainstream NBN prices are directly comparable, often for a better service or even slightly cheaper, than current ADSL pricing, it is factually incorrect for the Coalition to state that consumer NBN prices will be higher than current broadband prices. And if prices were to increase, given the fact that NBN Co’s prices will remain the same, that price increase is not the NBN’s fault. That blame could be laid at the door of the retail ISPs.

With all this in mind, I would hope that the Coalition would refrain from making this claim in public in future. Or, if it does make this claim, I would hope that it would provide some evidence to make its case. This debate is not a matter of opinion. This debate is about objective fact.