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Telstra rivals cheer Rudd plan Print E-mail

Telstra rivals cheer Rudd plan



Nicola Berkovic | April 08, 2009

THE galaxy of telecommunications and internet companies that live in Telstra's shadow -- even those that spent millions of dollars bidding to get involved in the national broadband network -- yesterday welcomed the Government's move to ditch the tender and build the network itself.


Optus, Primus, Internode and other smaller providers responded enthusiastically yesterday, with only ACT utility TransACT saying it was disappointed with the outcome after spending millions preparing a bid.

TransACT chief executive Ivan Slavich ruled out legal action, acknowledging that the Government was within its rights to abandon the process in favour of its own $43 billion plan to get fast broadband into every Australian home and business.

"It's an ethical question," Mr Slavich said. "We're not a huge company and we spent a lot of money putting together a proposal in good faith."

He said the company was still keen to engage with the Government on the project.

The Rudd Government yesterday shocked the market with plans to roll fibre cable into 90 per cent of the nation's homes and business, after initially requesting bids for a less extensive "fibre-to-the-node" network.

The network, to be partly private-funded, will deliver speeds of up to 100 megabits per second to most Australians, with those in rural and remote areas promised 12Mbps using alternative technologies.

Canadian company Axia NetMedia, which had been one of the favourites to win the bidding, said yesterday's outcome was better for Australia than the FTTN proposal. "They're on the right path," said chief executive Art Price. "We've never supported the fibre-to-the-node concept, it's really fibre to nowhere."

Mr Price left the door open to participating in the network rollout. But he said the challenge was to offer a timely and efficient service so it attracted customers to the network.

Optus, another favourite to roll out the network, said it was "strongly supportive" of the decision to build the network as well as moves to overhaul the regulatory framework.

A discussion paper released yesterday canvasses several options to tackle the dominance of Telstra in the Australia market, including the controversial issues of "functional separation" that would split Telstra into network and retail arms.

The creation of a new "open access" fibre network wholly independent of Telstra would ensure all telecoms and internet players, including Telstra, were treated the same.

Optus director of government and corporate affairs Maha Krishnapillai said the Government had "recognised the fundamental problems in our sector for the last decade".

"We've said throughout the process that we are prepared to invest where the regulatory settings are right," Mr Krishnapillai said. "We want to see separation of the network. We don't what Telstra to somehow come in the back door. We want to see genuine open access. We want to see a strong mandated role for the (Australian Competition and Consumer Commission)."

Mr Krishnapillai said the company would consider options to become involved in the Government's proposed network.

Paul Twomey, the chief executive of ICANN, which looks after the internet naming system, said the outcome had taken the best targets and lessons on functional separation from around the world.

But Dr Twomey said the Government and industry needed to focus on fuelling demand for high-speed broadband with new export-oriented services and applications such as digital conferencing.

Industry analyst Paul Budde welcomed the move to skip the "halfway house" of FTTN and go straight for fibre-to-the-premises. He said Australia would become a world technology leader.

Internode managing director Simon Hackett said he was "gobsmacked" the Government had been brave enough to take over the rollout.

Primus chief executive Ravi Bhatia said the plan would deliver substantial competition benefits to consumers and businesses. "It is clear the Government is serious about addressing Telstra's stranglehold and unlocking the competitive potential of the industry," Mr Bhatia said.


SOURCE: AustralianIT.news.com.au
 

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