Telstra Makes A U-Turn

Telstra has long argued that the structural separation of the wholesale and retail arms of their business was not in their best interest. That it would represent an unreasonable burden upon itself and its shareholders.

Telstra have applied their virtual monopoly over the copper network in Australia since the day copper was first laid in this country. If anyone wants access to it – and therefore access into every home and business in the country – Telstra can pretty much charge what it wants. There is no other option for inbound/outbound services supplied by copper line, and everyone has to play the Telstra game. Having worked for a couple of different ISPs, I know exactly how their price-gouging mechanisms work in regards to access into their copper network.

At first glance however, exactly why they have been vehemently against the separation of their retail and wholesale businesses is still a strange question. Even if the wholesale arm was separate, it would still be the only owner of the network, and they could continue to use the charges they enforce on other ISPs to subsidise their wholly owned Bigpond concern – who they, strangely enough, charge a substantially smaller amount for access to the core copper network.

The bottom line is that what they are really worried about is the forthcoming fibre-to-the-home (FttH) network proposed under the National Broadband Network (NBN). Their copper will become obsolete as people move from the antiquated copper systems, to the faster and more reliable optical fibre systems. More importantly, Telstra won’t own it, so they can’t gouge any more – access to the local loop will finally become a level-playing field for all service providers, internet or otherwise.

Which makes a recent reversal of Telstra’s position interesting:

“There is now an agreement on a preferred model… that will see a progressive transition from Telstra‚Äôs copper access network to a fibre to premise National Broadband Network – and agreement that there needs to be an acceptable solution to the use of ducts and backhaul infrastructure that will deliver structural separation.”

Oh really? Seems a lot can happen in two months! At least they are finally seeing the bigger picture. Now, if we can only get rid of this mandatory filtering plan…