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March 17, 2010
As expected the Coalition has declared its automatic opposition to any move to split Telstra using legislation that functionally separates a non-co-operative Telstra into wholesale and retail businesses, deny it new wireless spectrum and force it to sell its half-share of Australia's dominant pay TV operator, Foxtel. The Opposition's is a futile bid to preserve the Telstra status quo.
Though this opposition gives more bargaining power to the cross-bench senators, Senator Steve Fielding continues to oppose the reform, the legislation, which was rejected by the Senate, has been withdrawn until ---when?
The NBN Co has begun its network rollout in Tasmania and is on its way to become the dominant 'access' network provider. However, as expected, the negotiations with Telstra on the question of how much Telstra should be paid to co-operate with the network's construction are going b nowhere---as expected. Malcolm Maiden says that:
The commercial equation is unchanged: there is a maximum price NBN Co can commercially justify paying Telstra in return for access to Telstra ducts and pipes down which the new broadband fibre will run, and for the progressive adoption of Telstra customers as Telstra's existing network is overrun. That price is significantly less than Telstra says it can accept.
Stalemate as expected as they are billions apart and it is becoming less and less likely that Telstra and the NBN Co will agree on a deal.
Where to now? It's either the structural separation of Telstra, as the dominant incumbent, and/or the transfer of it's wholesale customers (which would include making the dominant incumbent a wholesale customer). Telstra could go it alone even though a stand-alone copper network would have little point once the NBN is built without Telstra. The NBN is going to be built and it will displace Telstra’s fixed line network – which means that network has already been substantially devalued even as the NBN is being built.
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Minister Conroy was on Lateline He comes across as a party strong arm --dictatorial even. They appear to be moving to building the NBN with no Telstra involvement. The NBN is going forward, with or without the gorilla.
Does that mean that the NBN Co will stand on it's on two feet and fight against Telstra for business? How will it gain as many customers as possible in the shortest time?
Then the Labor Government is going to sell the NBC Co. down the track--after the 8 year build is complete. Who then owns the wholesale fibre to the premises broadband network?