DISQUS

Rowan · 8 months ago

Spinning off Telstra's wholesale arm into this new venture would certainly give it a head-start, and I hope that's what they do. You're right that it doesn't make sense to duplicate networks, but at the same time, keeping the status quo would be worse.

The problem is that Telstra's record indicates that they don't really like to play ball, that they are quite happy with the monopoly that they have... so would you support the Government forcing Telstra to give up its wholesale business?

Duncan Riley · 8 months ago

Rowan,
don't get me wrong, I'm not pro-Telstra, and as a concept the one thing I like about the NBN is that it takes Telstra out of the picture.

In terms of Government intervention in Telstra: yes, 100% support it, and it can be done. It has already been done in NZ after privatization. In the US, they broke up AT&T as well on competitive grounds. Howard (and Beazley before him, Beazley was the one who was behind the initial Telstra sales) made the huge mistake of not splitting wholesale and retail.

Mike · 8 months ago

Creating a whole new entity sounds like a huge expense. The fibre optics are only going to be a small percentage of the total cost.

And who is going to work at this new company? Ex-Telstra employees of course, which means it will have the same culture and mindset of Telstra.

Peter · 8 months ago

How much of that cost is to ensure there is enough bandwidth to deliver 100mbps for each home. I know very little of Australia's network infrastructure, but Im willing to bet a significant amount of this money is for the bandwidth for the backhaul

Jonas · 8 months ago

Appreciate your thoughts about duplication on waste and I must say I agree with them.

Nice post!

All the best,
JOnas

Jeff Waugh · 8 months ago

Why do you keep doing calculations based on households?

Duncan Riley · 8 months ago

Because the supply to households is the primary cost.

ben · 8 months ago

Duncan - all good points but don't you think that these things may have already been tested with telstra and the like? the duplication is one thing - but if the govt tries to force telstras hand whats your assessment of the risk that the govt will get bogged down in courts and parliament to get what it wants? potentially delaying the whole process rather then as you anticipate saving the govt time. I will take a wager that starting from scratch will actually be quicker and cheaper in the long run. cheers

ps why make the article about Stilgherrian?

Duncan Riley · 8 months ago

Ben
about Stil because of his quote in Crikey. Don't get me wrong, I could spend weeks on end with Stil, one of the smartest writers in our space, and I value every time I get to spend time with him.

No on the court side if it's done properly. Telstra will bitch and moan, but so does every near monopoly that gets broken up. It's been done in NZ, and done in the US. What's missing here is the political will

Cameron · 7 months ago

I see problems here.

1) A new network is the point, It becomes an asset,
2) Starting from scratch allows it to be actually built correctly. There is no point trying to patch existing infrastructure, in the long run, its a waste of money. Telstra and Optus's networks are built around legacy systems.
3) Telstra's cable network is just that, cable. There are limits (that aren't far off Telstra's 100Mbit plan). With how Optus is replacing LAT with VoIP (which I'm led to believe is because Motrola are no longer producing CAU's) cable is a legacy technology. (Don't get me wrong, I'm a hge fan of the HFC networks)
4) This is part of a stimulus package. The government claim that most of the cost in the NBN will the "trenches" etc. The idea is that it creates lots of jobs, which mean more tax revenue for the government, more spending in the economy etc. Rather than just giving everyone more KRudd $$, this money creates jobs, and the community benefits with more infrastructure.