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telecommunications: twists and turns « Previous | |Next »
April 3, 2008

Infrastructure is crucially important for the development of user generated content of Web 2 and the shift to the knowledge economy, yet Australia's telecommunications infrastructure is middling to poor. Consider the implications of the Rudd Government's cancellation of the Opel contract, which was designed by the Howard Government to deliver broadband to regional and rural Australia.

Conroy's cancellation effectively closes down competition, entrenches the power of Telstra, and that leaves us with the fibre-to-the-node broadband network subsequently proposed by Conroy in his magic pudding mode. All those conduits lead to Telstra and it makes it more difficult for the Group of 9 companies in their effort to develop an FTTN plan in competition with Telstra's own FTTN plan.


Opel was created by the Howard government, in part, to politically neutralise Labor's own $4.7 billion plan for a national FTTN broadband network. Even though Opel was flawed and politically driven, it did promise real benefit and competition to regional Australia as it offered broadband for those regions Telstra had no interest in.

So all the Government's eggs are now in the FTTN basket, and Telstra looks as if it is now the only party that can deliver the network. Telstra is the logical builder of FTTN, which is not a new network but an extension of its existing national fibre network. What is still being rejected by Conroy is the long-term answer---fibre-to-the-home.

Conroy's decision leaves us with a Telstra that behaves as if it has a God-given right to taxpayer money and to screw both competitors and customers for everything it can get. Telstra is already insisting on capital investment returns at a level that only near-monopolies get.

WiMax can work but the issue is the cost. For instance, Internode's Coorong and Yorke Peninsula network projects were strongly backed by the Coorong District Council and District Council of Yorke Peninsula, underpinned by the SA State Government’s Broadband Development Fund, and subsidised by the Australian Broadband Guarantee. This has enabled Internode to bring metro comparable broadband to several parts of South Australia. Internode have publicly stated that Telstra backhaul is a major limiting factor to further deployments.

One sign of hope is that Internode states that wireless broadband would continue to play an important roll in delivering rural broadband services alongside the Government's planned Fibre to the Node (FTTN) network.

| Posted by Anon at 12:59 PM | | Comments (12)


all the commentary in the media has been about clever Conroy has been in saving the Rudd Government saving $636 million, thereby helping Tanner find the $4 billion in savings.

Will they help the regional ISP's broadband the bush? Or will they turn a blind eye to Telstra driving the regional ISP's out of business

Nobody knows if WiMax can work, whilst a wireless technology it is unproven. Most wireless technology fails when the weather interferes.

you claim:

'Nobody knows if WiMax can work, whilst a wireless technology it is unproven'

So how come Internode are operating it successfully on The Yorke Peninsula in SA? The post's links indicates this.

Internode looks a good little company.
I am presuming that anon works for internode so could he tell us what the value of the company is and whether buying shares is a good idea.

I had wSDL in Virginia. It was ok, but not good. Fibre was better, more consistent and cheaper. Lots of interference issues. Interference is only going to get worse as more and more of the public spectrum is getting used.

agreed. But it is a way of broadbanding a sparsely populated region--Coorong + Yorke in SA--- where there will be no fibre because it is not cost effective. That is why Steven Conroy's high speed 98% coverage is a magic pudding.

yes Internode is a good little company. Recognized as one of the better ISP's. As to investing you will need to check that out with your stockbroker. Conroy looks to be biased towards a big bang solution with a single provider, which risks strengthening Telstra's monopoly.

Labor's FTTN is an incumbents position as it necessitates integration with Telstra's copper wires to the customer. It enables Telstra to transform its declining copper wire analogue monopoly into a digital broadband fibre monopoly of the future. The effect is to stifle competition. hence the bum fight between Telstra with an eye to future profits and the government with an eye to competitiveness in the telecommunications industry. There's your policy dilemma.

what do you suggest as a way of addressing the dilemma at a policy level?

I have had internet in the Riverland of SA since it was first available. My first ISP was in Renmark, a telephone line link. It was supplied at a rate of 7mb until it got to 4mb when the schools came online at 9am.
I investigated Internode when they first started in SA. Contracts and pricing made me rethink. I then found the commonwealth subsidy to install satelite. I jumped and have found it most successful.
True there have been two occasions when it has gone down briefly,cloud?,unexplained reasons, I lost phone connections too, that too is satelite. It was for only hours and I'm not reliant on my connection for business, I've retired. I have now been with the satelite connection for a couple of years and find speed no problem. tests show I have 344160 bps connections each test, I pay $34 a month for one gig downloads, I've twice exceeded it.
The instal cost me nothing and I'm way ahead with connection speed and cost, and the bill I can understand.
A satisfied fluff4

America is similar in size to us but does not have the vast areas of sparsely separated potential users. So it was easier for them to set up their network because the population in areas made it financially viable. Still broadband only goes to 61% of homes.
When people talk about percentages of coverage they should remember that not 100% of people will want it. I know this is a bit of a back wards point but it is relevant. By the time that it comes around that the internet is an absolute necessity (if ever) and we are a long way from there yet the wireless network will be more technologically advanced.
Lines will eventually be out dated for the internet and electricity.

Internode are more for the top end of the market from what I can see.

It's good that satelite works for you. It indicates that there wil be ways sof delivering brodband to rural and regional Australia.

The thing about telstras wireless network is that it dips into 2 pools of money. The mobile phone users and the internet user.That is a big economic factor in the regional push.
These little boutique companies have their place but they will always be cap in hand to government to set up regional areas. Telstra has the ability over time to get the job done.
Yeah sure its a monopoly. Who cares. $59 a month is what I pay them for unlimited use. Big deal.
The same people that whine about Telstra probably do the same about Microsoft.
Time to put the foil hats on guys their a conspiracy a comin'