A number of events that have occurred over the past month has me very annoyed when it comes to the behaviour of some telecommunication carriers in Australia. Our Fibre to the Home market is rapidly growing (abet more slowly than our neighbors), but the behaviour of some organisations is causing confusion for the market and in particular the developers. Our complex regulatory regime has created an opportunity for some to create Fear Uncertainly and Doubt (FUD) - a situation we don't need in this time of slowing economic growth and tightening monetary policy. If backers are confused and unclear about an investment decision they go back to the basics and lower their risk. In the FTTH market, this means housing estates lose out on having fibre reticulated.

Just this week I have had calls from two developers and a client; and participated in two meetings (on opposite sides of the country) where the information people have been provided is at least confusing and in some cases substantially misleading.

The first is an assertion that Australia's longest running FTTH operator - Broadcast Engineering Services/E-Wire - has gone bankrupt and all their estates have been turned over to Telstra. This has been reported to me by a developer in Western Australia, two senior government representatives in Queensland, and a client in New South Wales. All the same claim but from different sources. In speaking with Tim O'Dea the General Manager of BES, he said "BES is very much alive and well and continuing to expand our customer base". Granted they lost Ellenbrook to Telstra and one of their clients - Satterley Group - also signed with Telstra, but that was only for future estates. They continue to grow their business with new estates soon to come online.

The second issue relates to the NBN and advice - and I use that word lightly - given to a client by a third party whereby they were informed "Optus would win the NBN and roll out the network within a year". Now I must say this assursion was not made by Optus and I don't think they would appreciate their name being associated as it was. However this did certainly cause concern for my client and the investment they are considering in their estate. More alarming was the statement that followed which allegedly claimed FTTN was a better technology, offering faster and more services than the technology they were considering. Why would you invest your own money when the government was going to do it for you?

The reality is the NBN will only deliver a fraction of the services that a true broadband network using FTTH can offer. Furthermore, the NBN is currently focused on reticulating faster broadband services into existing brownfield areas, and it is unlikely to service new greenfield estates. The communications minister, Stephen Conroy, said back in March, "if it were within my power, I would mandate FTTH in greenfield estates". He went on to indicate this would be done outside of the NBN process.

The last issue which is very confusing for developers are misleading claims about the Universal Service Obligation. One developer who wished to remain anonymous to avoid repercussions said "Telstra told us only they have the USO and it is mandated for them to deliver services to every household in Australia". "They gave us the impression we had to deal with them [Telstra] for our telecommunications needs".

While it is true that Telstra has the Universal Service Obligation, it is only for the delivery of the "Standard Telephone Service" and does not apply to products such as Internet, TV, PayTV or any other advanced service. As the name implies the "Standard Telephone Service" is just that "a service". It is not a product or technology, and any suggestion that it must be delivered over a copper or fibre network is misleading.

The STS is currently delivered today over many forms of technology including fibre, copper, and wireless. The Act was specifically written to ensure it was technology neutral. The USO also applies were a customer requests the service from the Universal Service Provider and only if that service cannot be provided by any other carrier in Australia.

So does Telstra have to provide the USO? Yes. Does that mean they have to build an underground cable network in an estate using copper or fibre? Not necessarily. Are they mandated to build an underground network to deliver the service? Absolutely not! They are mandated to deliver a telephone service using what ever technology is appropriate and only if no other provider is willing to deliver the service.

I have recently completed a twelve page white paper which addresses eight frequently asked questions in regards to the telecommunications act and building local access networks. Anyone wishing to get a copy of this paper can contact me directly.


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