Showing posts with label TERRiA. Show all posts
Showing posts with label TERRiA. Show all posts
In a three part interview Business Spectator's KGB team of Alan Kohler, Robert Gottliebsen and Stephen Bartholomeusz discuss with the the three leading bidders about their proposals.
The first interview with Telstra chairman Donald McGauchie has him explaining:
The second interview with Terria chairman Michael Egan, former New South Wales treasurer:
The third interview with Acacia chairman, and former Telstra Countrywide boss, Doug Campbell:
It is interesting that Acacia is now very much in the picture with the NBN. Two weeks ago the media and some telcos such as AAPT CEO Paul Broad, was suggesting it was a two horse race between Telstra and Terria and few gave any credence to the other players. I was the only one suggesting Acacia would be a strong contender.
The first interview with Telstra chairman Donald McGauchie has him explaining:
- The reason the telco put in a proposal, rather than a bid, saying unless it knows what the rules are, it cannot produce a bid that makes sense
- He rejects the Terria bid, saying it cannot be described as such without concrete sources of funding and compares their situation to the 'glory days of Babcock & Brown
- He launches a savage attack on the credentials of the Optus consortium's chairman Michael Egan
- He rejects any suggestion of a single desk for telecommunications
- Under Telstra's proposal, the lowest point at which people can get access is $29.95 retail price, with a one megabit capacity
The second interview with Terria chairman Michael Egan, former New South Wales treasurer:
- The national broadband network (NBN) must be for the good of the country and not Telstra's bottom line, describing Telstra's targeted rate of return as 'exorbitant'.
- Terria will not divulge the commercial arrangements of the bid, but it is confident that the funding is 'robust' and will be very attractive to the government
- The consortium is basing its rates of return on infrastructure, in a similar model to utilities
The third interview with Acacia chairman, and former Telstra Countrywide boss, Doug Campbell:
- There are about a dozen or so former Telstra employees involved in Acacia
- On the involvement of Solomon Lew and Doug Shears, Campbell says they paid more than the bid bond, adding that they put money up to allow the team to come together to put this bid on the table
- There's a risk, should Optus win the bidding process, that there will be a conflict between its retail and wholesale activities
- While fibre-to-the-node forms the bulk of Acacia's bid, some of its services would be fibre-to-the-premise, right to the homes or businesses where the fibre does exist
- Acacia is proposing to cover 100 per cent of the population
It is interesting that Acacia is now very much in the picture with the NBN. Two weeks ago the media and some telcos such as AAPT CEO Paul Broad, was suggesting it was a two horse race between Telstra and Terria and few gave any credence to the other players. I was the only one suggesting Acacia would be a strong contender.
I am sure many of you have already seen the news that the NBN bids are all in.
As I predicted in my last post there were four national bidders in Telstra, Optus Axia, and Acacia. On top of this there is also the state bids from the Aurora Energy/Tasmanian Government (TAS) and TransACT (ACT). The only bit I got wrong was TERRiA did not bid - perhaps not a surprise considering the loss of support from AAPT, Soul/TPG, TransACT and Powertel.
Two weeks ago I posted an article were I said my money was on Acacia to win the NBN. Someone posted a comment that I was likely to lose my money (or my job) over this, but I think given the situation many factors have changed.
Firstly Telstra have failed to submit a conforming bid and despite Senator Conroy's protests, tender guidelines require conforming bids are assessed first and if one bid meets the requirements, that must be taken over any non conforming bid. Telstra's bid may very well never be considering unless the government wants to break its own rules - and potentially end up in court.
TERRiA failed to submit a bid instead, falling in being Optus Network Infrastructure (a Singtel/Optus company formed just for the NBN) and supporting their proposal and business model. Terria revealed details of its proposal last week. It costed the network at about $15 billion and said this would buy 75,224 nodes, two satellites, 1360 new wireless base stations and 100,000km of fibre.
Acacia however has finally shown its hand and has bid a truely open access network with a mix of technology including FTTH, FTTN and Wireless - exactly the approach I have been espousing for the past 8 months. They have a clear separation between the operator of the infrastructure and the many retailers of services that run over that infrastructure - the key to open access which Telstra is refusing to consider with their objection to structural seperation. They have also pledged a fair return for owners of existing assets for use of their facilities, so they are happy to co-exist with existing networks.
So we now sit tight over Christmas for the "expert panel" to evaluate the bids within 6 weeks, which makes it the 7th of January for a decision date. Looks like the expert panel and their team of technical, commerical and legal advisors are not having Christmas this year.
As I predicted in my last post there were four national bidders in Telstra, Optus Axia, and Acacia. On top of this there is also the state bids from the Aurora Energy/Tasmanian Government (TAS) and TransACT (ACT). The only bit I got wrong was TERRiA did not bid - perhaps not a surprise considering the loss of support from AAPT, Soul/TPG, TransACT and Powertel.
Two weeks ago I posted an article were I said my money was on Acacia to win the NBN. Someone posted a comment that I was likely to lose my money (or my job) over this, but I think given the situation many factors have changed.
Firstly Telstra have failed to submit a conforming bid and despite Senator Conroy's protests, tender guidelines require conforming bids are assessed first and if one bid meets the requirements, that must be taken over any non conforming bid. Telstra's bid may very well never be considering unless the government wants to break its own rules - and potentially end up in court.
TERRiA failed to submit a bid instead, falling in being Optus Network Infrastructure (a Singtel/Optus company formed just for the NBN) and supporting their proposal and business model. Terria revealed details of its proposal last week. It costed the network at about $15 billion and said this would buy 75,224 nodes, two satellites, 1360 new wireless base stations and 100,000km of fibre.
Acacia however has finally shown its hand and has bid a truely open access network with a mix of technology including FTTH, FTTN and Wireless - exactly the approach I have been espousing for the past 8 months. They have a clear separation between the operator of the infrastructure and the many retailers of services that run over that infrastructure - the key to open access which Telstra is refusing to consider with their objection to structural seperation. They have also pledged a fair return for owners of existing assets for use of their facilities, so they are happy to co-exist with existing networks.
So we now sit tight over Christmas for the "expert panel" to evaluate the bids within 6 weeks, which makes it the 7th of January for a decision date. Looks like the expert panel and their team of technical, commerical and legal advisors are not having Christmas this year.
Having avoided publishing too much on the NBN in recent months - because most of the reporting is purely speculation as the bidders are all under gag orders - it is time to summarise the recent events that have taken place.
Perhaps the biggest news is the former G9 now called TERRiA has started to crumble as one by one the original group of nine Australian Telcos has dropped to only five. AAPT merged with Powertel last year, reducing the group to eight, and they were the first of the telcos to drop out last month. Soul was taken over by TPG who decided it was all too hard to manage their own backyard let alone be part of a team. TransACT was the fine partner to withdraw, but they were already submitting a separate bid for Canberra only. So that leaves Optus, Internode, iiNet, Primus, and Macquarie telecom to hold up the team.
Paul Broad, the CEO of AAPT, wrote an article recently for The Australian where he claimed "We're weeks away from the government commencing its selection process to award Terria or Telstra". A little bit presumptuous there Paul, considering there are at least another four bidders that I am aware of also in this; one of which I think will put forward a more compelling solution than either TERRiA or Telstra.
Shadow Communications Minister, Senator Minchin has been on the front foot over the past weeks attacking the Government over its handling of the NBN and the value it will bring to Australia. In response to Telstra's submission to a Senate hearing into the project that operationally it simply could not build or maintain a world-class NBN with further separation, the Senator said "Telstra's evidence was a damning indictment of Labor's fatally-flawed NBN tender process and highlighted just how unrealistic many of its key objectives are".
Speaking at the Broadband World conference in Sydney last week, Centre for International Economics (CIE) director, Kerry Barwise, said a key dynamic for ensuring competition is the rate of return sought by the National Broadband Network (NBN) builder. His analysis into the NBN showed a market and regulatory structure that permitted the exercise of market power through vertical integration and if permitted would allow the operator to obtain a relatively high rate of return on equity which in turn would lead to a loss of GDP of around 0.35 per cent per annum. In other words if Telstra wins the NBN, we are going to be heading backwards - no news there. “So with 0.35% what happens is, every five years the community will pay again for this asset," he said. "The community would pay the first time and then every five years they would have pay again through high prices.”
Finially my own views on the NBN. As it stands today, I would be placing my money on Acacia as the most likely winner. They are a dark horse and have not said much about what they are doing - perhaps because they are just getting on with the job. Just look at the team:
* Two ex-Telstra senior executives - gives them the telco experience required to make a competitive bid
* A director of a major international bank - a source of debit funding
* One of Australia's richest men - a source of equity funding
* Connections to Israel and the Jewish community - another source of equity funding
* A director from Leighton Holdings - a construction team to build the network, but also owns Australia's second largest fibre network providing a existing operating vehicle and much needed backhaul capability
* A director from Macquarie Infrastructure Group - another source of debit/equity funding significantly involved in big infrastructure projects and as the government has said this is the largest in recent history.
* Directors or former directors from various big companies such as SEEK, Berri, and Uncle Tobys
With this amount of business smarts I am sure they are not in this to come anywhere but first.
Perhaps the biggest news is the former G9 now called TERRiA has started to crumble as one by one the original group of nine Australian Telcos has dropped to only five. AAPT merged with Powertel last year, reducing the group to eight, and they were the first of the telcos to drop out last month. Soul was taken over by TPG who decided it was all too hard to manage their own backyard let alone be part of a team. TransACT was the fine partner to withdraw, but they were already submitting a separate bid for Canberra only. So that leaves Optus, Internode, iiNet, Primus, and Macquarie telecom to hold up the team.
Paul Broad, the CEO of AAPT, wrote an article recently for The Australian where he claimed "We're weeks away from the government commencing its selection process to award Terria or Telstra". A little bit presumptuous there Paul, considering there are at least another four bidders that I am aware of also in this; one of which I think will put forward a more compelling solution than either TERRiA or Telstra.
Shadow Communications Minister, Senator Minchin has been on the front foot over the past weeks attacking the Government over its handling of the NBN and the value it will bring to Australia. In response to Telstra's submission to a Senate hearing into the project that operationally it simply could not build or maintain a world-class NBN with further separation, the Senator said "Telstra's evidence was a damning indictment of Labor's fatally-flawed NBN tender process and highlighted just how unrealistic many of its key objectives are".
Speaking at the Broadband World conference in Sydney last week, Centre for International Economics (CIE) director, Kerry Barwise, said a key dynamic for ensuring competition is the rate of return sought by the National Broadband Network (NBN) builder. His analysis into the NBN showed a market and regulatory structure that permitted the exercise of market power through vertical integration and if permitted would allow the operator to obtain a relatively high rate of return on equity which in turn would lead to a loss of GDP of around 0.35 per cent per annum. In other words if Telstra wins the NBN, we are going to be heading backwards - no news there. “So with 0.35% what happens is, every five years the community will pay again for this asset," he said. "The community would pay the first time and then every five years they would have pay again through high prices.”
Finially my own views on the NBN. As it stands today, I would be placing my money on Acacia as the most likely winner. They are a dark horse and have not said much about what they are doing - perhaps because they are just getting on with the job. Just look at the team:
* Two ex-Telstra senior executives - gives them the telco experience required to make a competitive bid
* A director of a major international bank - a source of debit funding
* One of Australia's richest men - a source of equity funding
* Connections to Israel and the Jewish community - another source of equity funding
* A director from Leighton Holdings - a construction team to build the network, but also owns Australia's second largest fibre network providing a existing operating vehicle and much needed backhaul capability
* A director from Macquarie Infrastructure Group - another source of debit/equity funding significantly involved in big infrastructure projects and as the government has said this is the largest in recent history.
* Directors or former directors from various big companies such as SEEK, Berri, and Uncle Tobys
With this amount of business smarts I am sure they are not in this to come anywhere but first.
As the deadline for bids to build Australia's national broadband network draws closer, the two leading contenders Telstra and the Terria continue to hurl insults as they try to convince the public and the Government why they should be responsible for the project.
Andrew Robinson from ABC's Lateline Business reports on the latest developments in this drawn out process to decide who will build Australia's next generation telecommunications backbone.
One of the commentators, David Kennedy from Ovum, has fallen for the myth that Fibre to the Home on a national scale is uneconomic in this country. He further says this is the case for many other countries; however this is contrary to what is happening with many governments and incumbent carriers now committed to large scale fibre rollouts - see FTTH: what is happening around the world. Kennedy also suggests (as does Telstra and Terria) a Fibre to the Node network will be a stepping stone towards a Fibre to the Home and it will be possible to upgrade it in the future. When will these "experts" learn the practicality and then the economics behind a migration from FTTN to FTTH is far more complex than some of the bidders are letting on.
Andrew Robinson from ABC's Lateline Business reports on the latest developments in this drawn out process to decide who will build Australia's next generation telecommunications backbone.
One of the commentators, David Kennedy from Ovum, has fallen for the myth that Fibre to the Home on a national scale is uneconomic in this country. He further says this is the case for many other countries; however this is contrary to what is happening with many governments and incumbent carriers now committed to large scale fibre rollouts - see FTTH: what is happening around the world. Kennedy also suggests (as does Telstra and Terria) a Fibre to the Node network will be a stepping stone towards a Fibre to the Home and it will be possible to upgrade it in the future. When will these "experts" learn the practicality and then the economics behind a migration from FTTN to FTTH is far more complex than some of the bidders are letting on.
TERRiA is bidding for the new broadband network, against TELSTRA and ACACIA. BRW's Foad Fadaghi asks chairman Michael Egan why he believes TERRiA's bid will be successful.
In an article by Andrew Colley of AustralianIT, the Optus led consortium Terria says it is close to announcing a financial partner to back its bid for the Rudd Government's national broadband project.
Terria had been in discussion with three potential financial backers, but with the defection of Macquaire Bank to the Telstra camp, they are now left with only two choices.
Telstra hasn't been making it any easier for Terria to find financial backers, with chairman Donald McGauchie now claiming its going to cost around $25b to build the network. Seems a moving target with Telstra, but I am sure its giving any potential investor a nervous twitch.
Several organisations have started to come forward and demand that if Telstra wins the NBN contract, structural separation must form part of the agreement. Naturally TERRiA have made this demand but also JPMorgan analyst Laurent Horrut has made a passing comment when providing a market rating for the organisation.
However, in an interview with ABC Radio National last week Kate McKenzie, Chief Executive of Telstra wholesale, said Telstra’s opposition to structural separation was based on observations of it having not worked anywhere else in the world.
“Basically it hasn't worked anywhere in the world, it never will work anywhere in the world, it will add cost, it will add complexity, and it will get in the way of proper investment in the network going forward,” she said.
Perhaps the best known structural separation is British Telecom (BT) with its network owner/operator OpenReach. Grant Forsyth, Head of Global Regulatory and Interconnection at BT Global Services, made a presentation at ATUG 2008 conference titled "Successes in a Functionally Separated world".. In the presentation he points out there are 8 myths that are frequently pedaled by incumbants to avoid the seperation process. The reality is once seperation occurs, competition, investment and growth occors faster than previously expected.
Here are some other recent news articles on separation.
ITNews - Terria slams telstra
The Age - Telstra structural separation backed
News Limited - Telstra must accept structural seperation
However, in an interview with ABC Radio National last week Kate McKenzie, Chief Executive of Telstra wholesale, said Telstra’s opposition to structural separation was based on observations of it having not worked anywhere else in the world.
“Basically it hasn't worked anywhere in the world, it never will work anywhere in the world, it will add cost, it will add complexity, and it will get in the way of proper investment in the network going forward,” she said.
Perhaps the best known structural separation is British Telecom (BT) with its network owner/operator OpenReach. Grant Forsyth, Head of Global Regulatory and Interconnection at BT Global Services, made a presentation at ATUG 2008 conference titled "Successes in a Functionally Separated world".. In the presentation he points out there are 8 myths that are frequently pedaled by incumbants to avoid the seperation process. The reality is once seperation occurs, competition, investment and growth occors faster than previously expected.
Here are some other recent news articles on separation.
ITNews - Terria slams telstra
The Age - Telstra structural separation backed
News Limited - Telstra must accept structural seperation
Friday was D-Day for the lodgement of the bank guarantees for the government's $5m bond for securing the right to bid on the National Broadband Network.
Speculation is rife as to who has submitted the bond. We know for sure that TERRiA and Telstra have entered the race as they have publicly announced their intentions. But there are a few interesting developments.
TransACT have lodged their own bond while being part of the TERRiA consortium. Chief executive Ivan Slavich said the TERRiA bid was the first priority, but a bond had been lodged to maintain flexibility. "We're part of the TERRiA consortium, but we're keeping our options open," Mr Slavich said. "We're very much committed to the consortium but a lot of other things need to happen between now and when the bid needs to be lodged". Some speculate that TransACT may be bidding directly just for a state based bid, however TransACT, who recently took control of Neighbourhood Cable, also has network in Geelong and Ballarat and Bendigo. Optus, another of the TERRiA consortium members also lodged their own bond backed by Singtel.
Sources close to Macquarie Bank confirmed that it had lodged a bond, taking the approach of a utility access model which would be separated from the retail providers. If this is true, their bid is most likely to be supported by industry and the state governments who have been demanding operational separation of the network from the retail providers.
It is also believed that the Canadian-based Axia NetMedia and the Tasmanian Government may have lodged bonds, however neither party have publicly commented if this is true - adhering to the rules of the tender.
EDIT: According to MIS Australia, the Tasmanian goverment has confirmed its lodgement of the $5m bond and will be making a State based bid to specifically address the state's broadband disadvantage relative to the rest of the nation.
So in all, there seems to be 6 bidders in the game.
Speculation is rife as to who has submitted the bond. We know for sure that TERRiA and Telstra have entered the race as they have publicly announced their intentions. But there are a few interesting developments.
TransACT have lodged their own bond while being part of the TERRiA consortium. Chief executive Ivan Slavich said the TERRiA bid was the first priority, but a bond had been lodged to maintain flexibility. "We're part of the TERRiA consortium, but we're keeping our options open," Mr Slavich said. "We're very much committed to the consortium but a lot of other things need to happen between now and when the bid needs to be lodged". Some speculate that TransACT may be bidding directly just for a state based bid, however TransACT, who recently took control of Neighbourhood Cable, also has network in Geelong and Ballarat and Bendigo. Optus, another of the TERRiA consortium members also lodged their own bond backed by Singtel.
Sources close to Macquarie Bank confirmed that it had lodged a bond, taking the approach of a utility access model which would be separated from the retail providers. If this is true, their bid is most likely to be supported by industry and the state governments who have been demanding operational separation of the network from the retail providers.
It is also believed that the Canadian-based Axia NetMedia and the Tasmanian Government may have lodged bonds, however neither party have publicly commented if this is true - adhering to the rules of the tender.
EDIT: According to MIS Australia, the Tasmanian goverment has confirmed its lodgement of the $5m bond and will be making a State based bid to specifically address the state's broadband disadvantage relative to the rest of the nation.
So in all, there seems to be 6 bidders in the game.
G9: Telstra has Buckley's chance of winning, but we dont want it either
0 comments Posted Friday, May 23, 2008THE newly appointed chairman of TERRiA consortium, Michael Egan, believes Telstra has "Buckley's chance" of winning the national broadband network tender — but hopes the formal G9 consortium does not win it either.
"None of the companies associated with Terria are all that fussed about owning and operating a monopoly network," Mr Egan said. "Their core business is in competitive markets — not running regulated monopolies. The reason they're putting together a bid is that they've got no guarantee that if they don't (that) someone else will come up with a satisfactory structure."
The full article published by the Age.
"None of the companies associated with Terria are all that fussed about owning and operating a monopoly network," Mr Egan said. "Their core business is in competitive markets — not running regulated monopolies. The reason they're putting together a bid is that they've got no guarantee that if they don't (that) someone else will come up with a satisfactory structure."
The full article published by the Age.
"Open Access" operator considers bidding for Australian NBN
0 comments Posted Thursday, May 22, 2008According to a Dow Jones Newswires, a company spokeswoman from Axia NetMedia (a Canadian telecommunications carrier based in Alberta) is considering a role in Australia's multi billion dollar National Broadband Network.
Axia has been hovering around both state and federal governments for several years, making presentations on the success of their broadband network in Alberta. One such presentation was to the Western Australian government which later spawned the "State Broadband Network" EOI. This seems to have gone the same way as the Queensland government's AU$550 million Brisbane FTTH network - NOWHERE!
Axia is best known as the company who built the Albert Supernet, a high-speed network that connected 429 communities across the Canadian state. The Government contributed to the building of the state-of-the-art IP network on the proviso it connected 4,200 government locations that included health, education, and municipal facilities.
Most interesting is the Alberta SuperNet uses an open access model which means any service provider in the province can use the SuperNet to deliver ultra-high speed services, including Internet access, to retail and business customers.
Axia is also the leading player in a consortium named OpenNet, which recently announced that it was bidding on the Singapore government's NBN project.
OpenNet proposed a comprehensive plan for a truly open access Fibre to the Home Network to cover the entire Singapore population. It intends to accomplish its "pristine open access" through:
With SingTel expressing some interest in bidding for Australia's NBN outside of the Optus lead TERRiA (formally G9) consortium, perhaps they are going to hitch up with their stable mate from OpenNet.
Senator Conroy should have taken a long hard look at the Singapore approach before running head long into our own NBN. In Singapore, they have created a three level operating model: NetCo - the network owner, OpCo - the network operator, and the retail providers who purchase wholesale services on the network. This ensures complete structural separation and ensures everyone is playing on a level field.
Axia has been hovering around both state and federal governments for several years, making presentations on the success of their broadband network in Alberta. One such presentation was to the Western Australian government which later spawned the "State Broadband Network" EOI. This seems to have gone the same way as the Queensland government's AU$550 million Brisbane FTTH network - NOWHERE!
Axia is best known as the company who built the Albert Supernet, a high-speed network that connected 429 communities across the Canadian state. The Government contributed to the building of the state-of-the-art IP network on the proviso it connected 4,200 government locations that included health, education, and municipal facilities.
Most interesting is the Alberta SuperNet uses an open access model which means any service provider in the province can use the SuperNet to deliver ultra-high speed services, including Internet access, to retail and business customers.
Axia is also the leading player in a consortium named OpenNet, which recently announced that it was bidding on the Singapore government's NBN project.
OpenNet proposed a comprehensive plan for a truly open access Fibre to the Home Network to cover the entire Singapore population. It intends to accomplish its "pristine open access" through:
- No individual parties having control over OpenNet;
- Three of the four OpenNet owners are not integrated telecommunications players hence there are no conflicting interests;
- Network is specifically designed to enable choice by OpenNet customers, large and small;
- Interests are aligned as OpenNet’s commercial success depends on its customers’ success.
With SingTel expressing some interest in bidding for Australia's NBN outside of the Optus lead TERRiA (formally G9) consortium, perhaps they are going to hitch up with their stable mate from OpenNet.
Senator Conroy should have taken a long hard look at the Singapore approach before running head long into our own NBN. In Singapore, they have created a three level operating model: NetCo - the network owner, OpCo - the network operator, and the retail providers who purchase wholesale services on the network. This ensures complete structural separation and ensures everyone is playing on a level field.
Press Release 21 May 2008
TERRiA, a consortium of eight major infrastructure based telecommunications companies, which will bid to provide Australia’s new National Broadband Network (NBN), was launched today.
Its Chairman, the Hon. Mr Michael Egan, said “TERRiA is now the unifying name for our consortium. Its mission is to provide an independent and competitive communication network for the nation.”
The new identity, derived from Terra Australis, is in keeping with the consortium’s objective of providing coverage to 98 per cent of the population across Australia.
Mr Egan said “We also like the fact that it’s phonetically the same as terrier which hints at the energy and tenacity which will be needed to win the best communication outcome.
“In a word it sums up both our determination and the scale of the National Broadband Network with the commitment of coverage across the land,” Mr Egan said.
Mr Egan said the $8-$10billion National Broadband Network was a visionary, nation building project. “It’s also a great opportunity for some long overdue micro-economic reform to help drive the nation’s productivity and economic efficiency.”
Mr Egan said fair and open access to monopoly infrastructure was a key plank of Australia’s National Competition Policy.
“I’ve got no doubt that if national competition reform had preceded, rather than followed, the telecommunications ‘reforms’ of the early 1990’s, the structure of Australia’s telecommunications industry would now be completely different and would be delivering better services at lower prices.
“The mistake in the early 1990’s was in leaving in place a structure where new telecommunications entrants were left largely at the mercy of the market dominant Telstra.
“Telstra remains the dominant player. It continues to own the core network and has a commercial incentive to frustrate natural competition through control of bottle neck assets.
“Australia can’t afford the same mistake being made again which is what will happen if Telstra is allowed to roll out another national network without separating its anti-competitive commercial interests.
“This time we need a genuinely level playing field that allows open competition among all companies using the common monopoly infrastructure.
“That will only happen if there is a structure that is pro-competition. A structure where one provider cannot exercise its dominance in multiple markets to inflate prices and restrict customer access to new, innovative services.”
About TERRiA
TERRiA is a consortium of eight major infrastructure based telecommunications companies which will bid to provide Australia’s new National Broadband Network (NBN). It includes AAPT, iinet, Internode, Optus, Macquarie Telecom, Primus, SOUL and TransACT.
Media contact:
Melissa Favero
Optus Corporate Affairs
+61 2 8082 7850
TERRiA, a consortium of eight major infrastructure based telecommunications companies, which will bid to provide Australia’s new National Broadband Network (NBN), was launched today.
Its Chairman, the Hon. Mr Michael Egan, said “TERRiA is now the unifying name for our consortium. Its mission is to provide an independent and competitive communication network for the nation.”
The new identity, derived from Terra Australis, is in keeping with the consortium’s objective of providing coverage to 98 per cent of the population across Australia.
Mr Egan said “We also like the fact that it’s phonetically the same as terrier which hints at the energy and tenacity which will be needed to win the best communication outcome.
“In a word it sums up both our determination and the scale of the National Broadband Network with the commitment of coverage across the land,” Mr Egan said.
Mr Egan said the $8-$10billion National Broadband Network was a visionary, nation building project. “It’s also a great opportunity for some long overdue micro-economic reform to help drive the nation’s productivity and economic efficiency.”
Mr Egan said fair and open access to monopoly infrastructure was a key plank of Australia’s National Competition Policy.
“I’ve got no doubt that if national competition reform had preceded, rather than followed, the telecommunications ‘reforms’ of the early 1990’s, the structure of Australia’s telecommunications industry would now be completely different and would be delivering better services at lower prices.
“The mistake in the early 1990’s was in leaving in place a structure where new telecommunications entrants were left largely at the mercy of the market dominant Telstra.
“Telstra remains the dominant player. It continues to own the core network and has a commercial incentive to frustrate natural competition through control of bottle neck assets.
“Australia can’t afford the same mistake being made again which is what will happen if Telstra is allowed to roll out another national network without separating its anti-competitive commercial interests.
“This time we need a genuinely level playing field that allows open competition among all companies using the common monopoly infrastructure.
“That will only happen if there is a structure that is pro-competition. A structure where one provider cannot exercise its dominance in multiple markets to inflate prices and restrict customer access to new, innovative services.”
About TERRiA
TERRiA is a consortium of eight major infrastructure based telecommunications companies which will bid to provide Australia’s new National Broadband Network (NBN). It includes AAPT, iinet, Internode, Optus, Macquarie Telecom, Primus, SOUL and TransACT.
Media contact:
Melissa Favero
Optus Corporate Affairs
+61 2 8082 7850
Clearly "a once in a generation opportunity" the Labour Party's National Broadband Network policy was an excellent strategy that could have provided individual benefit to millions of Australians but most importantly put our growing digital economy in a strong competitive position against the likes of Europe and Japan.
But being in opposition and putting up a policy in much easier than being in government and getting it implemented; particularly with an 800 pound Gorilla controlling the telecommunications landscape, and a hostile Senate blocking some of your key legislation required to make it work. While many strongly supported the Labour Party's policy, the implementation of that policy so far has left a lot to be desired.
The first thing that really bugged many has been the public consultation on the NBN. Many organisations (particular the FTTH Special Interest Group) made considerable effort to met the government's 3 week time frame to submit their views, only for the Expert Group to take little or no notice of the contributions made. The SIG compiled over 100 pages of issues and recommendations from 40 contributing members - an enormous effort which seems to have gone to waste as the Request for Proposal document was released only two weeks after the closure of the public consultation period. There is no way the tender was written after reviewing all those submissions, and it was most likely written in parallel (or even started before), making a mockery of the open process and value of the contributions from industry.
Secondly, and this has has been supported by many in the industry, is the extremely short time frame for the bid. As Bevan Slattery from Pipe Networks has said, the government gives more time for responding to a tender on photocopies than it has on the NBN. This is a $10billion investment, half of which is coming from government, and it requires detailed investigation to ensure a quality submission is made. So is the Government serious in making this an open process in which all players have at least a reasonably even chance of winning. At this stage, the only organisation who has committed to responding on time is Telstra.
I am a consultant to several companies (not the G9) wishing to form a consortium. The group already has commitment from two large international players (including a Telco), but they will not be making any submission unless the deadline is extended by at least 3-5 months, and only if the critical network information is released immediately. The disappointing aspect if this group does not get up due to time constraints; they are proposing to bid a predominately FTTH (rather than the Telstra or G9 FTTN) network.
Finally, the whole RFP has been widely criticised by the industry as a lost opportunity to fix a massive blunder by the previous government not to have kept the Telecommunications infrastructure within government (or structural separation if you wish) when selling off Telstra and deregulating the Telecommunications industry.
Lets hope the Senator Conroy does have second thoughts on the time frame and getting it right is more important than getting it quick.
But being in opposition and putting up a policy in much easier than being in government and getting it implemented; particularly with an 800 pound Gorilla controlling the telecommunications landscape, and a hostile Senate blocking some of your key legislation required to make it work. While many strongly supported the Labour Party's policy, the implementation of that policy so far has left a lot to be desired.
The first thing that really bugged many has been the public consultation on the NBN. Many organisations (particular the FTTH Special Interest Group) made considerable effort to met the government's 3 week time frame to submit their views, only for the Expert Group to take little or no notice of the contributions made. The SIG compiled over 100 pages of issues and recommendations from 40 contributing members - an enormous effort which seems to have gone to waste as the Request for Proposal document was released only two weeks after the closure of the public consultation period. There is no way the tender was written after reviewing all those submissions, and it was most likely written in parallel (or even started before), making a mockery of the open process and value of the contributions from industry.
Secondly, and this has has been supported by many in the industry, is the extremely short time frame for the bid. As Bevan Slattery from Pipe Networks has said, the government gives more time for responding to a tender on photocopies than it has on the NBN. This is a $10billion investment, half of which is coming from government, and it requires detailed investigation to ensure a quality submission is made. So is the Government serious in making this an open process in which all players have at least a reasonably even chance of winning. At this stage, the only organisation who has committed to responding on time is Telstra.
I am a consultant to several companies (not the G9) wishing to form a consortium. The group already has commitment from two large international players (including a Telco), but they will not be making any submission unless the deadline is extended by at least 3-5 months, and only if the critical network information is released immediately. The disappointing aspect if this group does not get up due to time constraints; they are proposing to bid a predominately FTTH (rather than the Telstra or G9 FTTN) network.
Finally, the whole RFP has been widely criticised by the industry as a lost opportunity to fix a massive blunder by the previous government not to have kept the Telecommunications infrastructure within government (or structural separation if you wish) when selling off Telstra and deregulating the Telecommunications industry.
Lets hope the Senator Conroy does have second thoughts on the time frame and getting it right is more important than getting it quick.
On the ABC's Inside Business program this morning, Optus chief Paul O'Sullivan said his company and the G9 will only respond to the National Broadband Network RFP if it gets an assurance from the Federal Government over structural separation and Australian Competition and Consumer Commission (ACCC) pricing powers.
Steven Letts of ABC News wrote a full article on this interview in which Mr O'Sullivan told interviewer Alan Kohler the current bidding process was "not a level playing field" and it was "ridiculous to expect Optus to participate in its current form".
Kohler pushed the question on bidding several times which O'Sullivan danced around like the consummate politician. O'Sullivan would not directly answer the question of them bidding unless the government extended the closing date for responses.
The transcript of the interview can be found on ABC InsideBusiness, along with the video of the interview.
Steven Letts of ABC News wrote a full article on this interview in which Mr O'Sullivan told interviewer Alan Kohler the current bidding process was "not a level playing field" and it was "ridiculous to expect Optus to participate in its current form".
Kohler pushed the question on bidding several times which O'Sullivan danced around like the consummate politician. O'Sullivan would not directly answer the question of them bidding unless the government extended the closing date for responses.
The transcript of the interview can be found on ABC InsideBusiness, along with the video of the interview.
Last Sunday was D-Day for public submissions to the Expert Group on the rollout of the National Broadband Network.
Several organisations have publicly announced the release of their submissions including the G9, Telstra and the FTTH Special Interest Group.
Telstra
Telstra wants the Government to impose an application fee and bonds on potential bidders for the FTTN tender, and set out other quantifiable benchmark criteria for the required technical and financial capabilities of the proponents.
According to their submission, Telstra expects every bidder to include a non-refundable $5m deposit with their Expression of Interest, followed by a $20m refundable bond with their RFP submission, and finally a $100m bond on short listing.
Telstra’s Executive Director of Regulatory Affairs, Dr Tony Warren, said "it is time for bidders to put their money where mouth is on FTTN. Our suggestions are for an efficient, objective, competitive RFP process which will fulfil the Government’s goal of commencing the National Broadband network build before the end of the year."
They also demand that bidders should have previous engineering and telecommunications experience; have a revenue base of $8billion; have invested at least $3billion in capital over the past 5 years; and currently has a minimum of 500,000 broadband subscribers - well that rules out Optus and/or the G9.
Telstra's submission focuses entirely on that the bidders' capability should be and how the RFP process should be conducted. They make not one useful suggestion or recommendation that could aid the delivering of this network.
The full Telstra submission can be viewed here.
Optus/G9
The submission by the G9 consortium of Optus, Macquarie Telecom, Primus, AAPT, Soul, iiNet, Internode and TransAct has asked Senator Conroy to adopt a two-stage process similar to that employed in Singapore's National Broadband rollout.
The G9 has suggested the Expert group consider flexibility in the technology used to deliver the Government's minimum speed requirements for the network. While in principal this is a good suggestion, the reality is DSL technology cannot deliver the required performance mandated by the Government.
The G9 also asked Senator Conroy to consider the terms of participation in the bid. In particularly whether bidders will be required to have structural separation between network ownership and network operations. Other suggestions included the use of the Government's $4.7 billion contribution; and the roll-out schedule for the network.
Of most concern by the G9 was the stranding of their investment in exchanged based DSLAMS. As voiced strongly at the FTTH round table in early march, iiNet are vehementy opposed to FTTN rollout. They even published a paper in 2006 ("The Myth of Fibre") which "debunked" FTTN as providing any additional bandwidth or feature than what iiNet currently offers.
FTTH Special Interest Group
Unlike the other two, the Fibre to the Home Special Interest Group did not have any agenda to push and had no vested interest in current investments. Instead they just wanted to ensure the $4.7billion is invested in a long term Network that provides the best outcome for the community and the country - not for a group of investors.
They make 24 key recommendations to the Government as to what needs to be done to ensure a successful deployment of a National Broadband Network that will rival anything else in the world. Some of those recommendations include:
The most suprising statement is the claim that a Fibre to the Home deployment reaching 98% of the community will cost only $9.8b. This is very different to the $30-$50b previously suggested by others to the Government. However the SIG back up their claims with supporting information that came from the TasColt and Bright projects which deployed FTTH into brownfield areas.
Several organisations have publicly announced the release of their submissions including the G9, Telstra and the FTTH Special Interest Group.
Telstra
Telstra wants the Government to impose an application fee and bonds on potential bidders for the FTTN tender, and set out other quantifiable benchmark criteria for the required technical and financial capabilities of the proponents.
According to their submission, Telstra expects every bidder to include a non-refundable $5m deposit with their Expression of Interest, followed by a $20m refundable bond with their RFP submission, and finally a $100m bond on short listing.
Telstra’s Executive Director of Regulatory Affairs, Dr Tony Warren, said "it is time for bidders to put their money where mouth is on FTTN. Our suggestions are for an efficient, objective, competitive RFP process which will fulfil the Government’s goal of commencing the National Broadband network build before the end of the year."
They also demand that bidders should have previous engineering and telecommunications experience; have a revenue base of $8billion; have invested at least $3billion in capital over the past 5 years; and currently has a minimum of 500,000 broadband subscribers - well that rules out Optus and/or the G9.
Telstra's submission focuses entirely on that the bidders' capability should be and how the RFP process should be conducted. They make not one useful suggestion or recommendation that could aid the delivering of this network.
The full Telstra submission can be viewed here.
Optus/G9
The submission by the G9 consortium of Optus, Macquarie Telecom, Primus, AAPT, Soul, iiNet, Internode and TransAct has asked Senator Conroy to adopt a two-stage process similar to that employed in Singapore's National Broadband rollout.
The G9 has suggested the Expert group consider flexibility in the technology used to deliver the Government's minimum speed requirements for the network. While in principal this is a good suggestion, the reality is DSL technology cannot deliver the required performance mandated by the Government.
The G9 also asked Senator Conroy to consider the terms of participation in the bid. In particularly whether bidders will be required to have structural separation between network ownership and network operations. Other suggestions included the use of the Government's $4.7 billion contribution; and the roll-out schedule for the network.
Of most concern by the G9 was the stranding of their investment in exchanged based DSLAMS. As voiced strongly at the FTTH round table in early march, iiNet are vehementy opposed to FTTN rollout. They even published a paper in 2006 ("The Myth of Fibre") which "debunked" FTTN as providing any additional bandwidth or feature than what iiNet currently offers.
FTTH Special Interest Group
Unlike the other two, the Fibre to the Home Special Interest Group did not have any agenda to push and had no vested interest in current investments. Instead they just wanted to ensure the $4.7billion is invested in a long term Network that provides the best outcome for the community and the country - not for a group of investors.
They make 24 key recommendations to the Government as to what needs to be done to ensure a successful deployment of a National Broadband Network that will rival anything else in the world. Some of those recommendations include:
- A national network topology standard based on open access principals
- A three layer model of seperate network owners, operators and retail service providers
- Sustainable funding for community and backhaul networks
- A centralised co-ordination office for development of technology and standards
- Reduction in regulatory obsticals
- Creation of a new network by overbuilding, thus creating true market competition.
- Use of technology (preferably FTTH) that can deliver a minimum of 100Mbps to every home
The most suprising statement is the claim that a Fibre to the Home deployment reaching 98% of the community will cost only $9.8b. This is very different to the $30-$50b previously suggested by others to the Government. However the SIG back up their claims with supporting information that came from the TasColt and Bright projects which deployed FTTH into brownfield areas.
According to the SIG, time is of the essence. OECD nations in Asia, America and Europe already have strategic plans for the deployment of National Broadband Networks. Some countries and regions such as Korea, Hong Kong, Japan, United States and Europe have significant rollouts of FTTP already underway. Australia has also started, but based upon experience to date, realises that a number of fundamental changes need to occur if Australia is to succeed and remain globally competitive in the emerging Knowledge Economy.
Their full submission can be viewed here.
Time is quickly running out and we only have one chance to get this right.
Carpe Diem!
Subscribe to:
Posts (Atom)
