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movement in telecomunications « Previous | |Next »
June 25, 2006

Finally we are getting somewhere with telecommunications as some sense is being shown by Telstra at long last. It's only taken them a decade.

Telstra has finally given ground by offering its competitors equal access to the planned $4 billion fibre optic broadband network on commercial terms. The fibre optic cable will cover regional cities and it wil be laid from telephone exchanges to nodes on suburban streets. The old copper wires will be used from node to home. Since this means that Telstra's competitors can send their own services over the network, competition will now be focused on the applications, services and content offered over the network, rather than Telstra selling the infrastructure itself. As it should be. We do not need a replay of the Telstra Optus cable fiasco with two fibre optic cable networks being built.

It will take 3-5 years to build the new network. Can Telstra deliver? Will Telstra earn enough delivering services on on the new fibre-to node (FTTN) network tto make it commercially viable?

This is a better place to be than a year ago, when Telstra was saying that no access to the new FTTN network would be granted to its competitors.

The downside is that those telcos who have built DSL networks using Telstra's copper phone lines to give consumers a better service will be disadvantaged, as the old lines will be switched off without compensation. That existing equipment is going to be stranded. They will be obliged to move to the upgraded infrastructure.

But I would be no better off. I use ADSL-2 and the speeds are comparable to the speeds Telstra is promising for the new network--24 megabits per second. The reason it is so slow--Singapore Korea and Japan are moving to networks with speeds of 100 megabits per second--- is that the fibre cable istops at the suburban node and it uses the existing copper wires to the home. Extending the fibre all the way to the home is the best telecommunications strategy. It shows that upgrading existing DSL over copper wires is is a short term or stop gap strategy, given the inherent technical limitations of copper.

Telstra is not proposing to extend the fibre all the way to the home. It will take 10-15 years for Australia to get fully fledged fibre to the home. So Telstra's proposal is another stop gap strategy, one designed to scare people from investing in ADSL2, and to ensure lighter regulation of Telstra by the federal government.

| Posted by Gary Sauer-Thompson at 10:32 AM | | Comments (0)