Dan Warne07 April 2009, 11:30 AM
Two high profile ISPs have welcomed the government's decision to scrap its fibre-to-the-node plans and build a fibre-to-the-home network instead.
Broadband customers will be the winners if the Federal Government delivers an eight-year project to build its own fibreoptic network covering Australia, says Internode managing director Simon Hackett.
"I'm gobsmacked,” he said – “In a good way!’. He continued: “If they do what they promise, they've actually got it right and Australia might just turn into a broadband front-runner country 10 years from now.
"This is exactly the outcome I’ve been arguing for, for ages – most recently at a
national telecommunications conference in December 2008.
"So while I’m naturally pleased that the government has decided to opt for the right technical solution (a new FTTH network on a wholesale only basis, independent of Telstra), I’m astonished that they’ve been brave enough to do it. In these challenging economic times, such nation-building investment is exactly the right response to the telecommunications challenges Australia faces for the next decade.
“If they take industry advice and build the new network 'outside in' – fixing blackspots first and installing where ADSL2+ is present, later – then everyone wins, because people with no broadband get it, while people who already have broadband can use the ADSL2+ competitive landscape in the meantime.
“This allows companies that have invested in that landscape to recover their investment before the new network renders it obsolete. But even then, like dialup access, that old access technology may stay around for years – and no one loses.
“It is a great relief that the Government has abandoned the Fibre to the Node (FTTN) delivery model which would have cost it $4.7 billion without cutting the mustard. Rather than squander its cash on FTTN or do nothing, it has the guts to build a Fibre to the Home network that will cost more than $40 billion.”
Hackett said although the project could in fact take as long as 10 years to build, it would deliver a “future-proof” broadband service that could operate for decades. “Just as copper served Australia well during the 20th century, fibre will provide the country’s nervous system for the 21sth century,” he said.
“The project announced today is good news for Australian consumers. Firstly, Telstra has no grounds to stop or delay it as the wholesale network is completely separate to Telstra’s existing copper network.
“Leaving the copper network in place will maintains the current ADSL2+ competitive broadband environment, so that Internode and its rivals have many more years of useful ADSL2+ network building ahead. As the new network emerges, we'll have access to it on an equal footing with everyone else. Bypassing the copper network also avoids the need for regulatory changes – this means the existing access regime can continue unchanged while the new network is put in place, in parallel.
“Progressively replacing the copper network over that long period will allow the industry to recover its copper-based broadband investments in a smooth manner. Existing customer services will remain in place in parallel, providing competitive pricing tension, rather than cutting off ADSL2+ abruptly.
“Telstra can't complain because it has ignored the chance to be a nation builder by building its own FTTH network. Instead the Government will build a new, wholesale-only, end-to-end fibre network that every carrier, including Telstra, has equal access to.
“Significantly, although the Government will be the majority owner, it intends to privatise the network five years after building it, which I think is exactly the right idea.”
iiNet, Australia's third largest ISP, also welcomed the announcement. Managing Director, Michael Malone, said the plan was the best news made for the Australian telecommunications sector in decades.
"This is the best of all possible outcomes and will ensure Australians have access to fast, affordable and competitive broadband," Malone said.
"In terms of the key criteria we were looking for in a National Broadband Network - open access, structural separation, fixing backhaul 'black spots' and regulatory reform - the Government has delivered.
Malone said not only would consumers benefit but the Australian telecommunications industry would be better off with increased competition, innovation and jobs.
"iiNet is well placed to continue our strong growth under the new world that will be created by the National Broadband Network. We are a market leader in product innovation, customer service, content provision, backed by a strong brand, and will now be able to compete on a truly open high speed network. This is like Christmas for Australian broadband consumers!
Malone said he congratulated the Prime Minister and Communications Minister for their vision and said he looked forward to working with the Government on the implementation of National Broadband Network -- a small olive branch to the government after iiNet's strong attacks on the government's internet filtering plan.