Barnaby: Telstra execs doing cartwheels over NBN Co deal

Jun 22, 2010 6:36 AM
Filed under Telco/ISP

Nationals leader damns "$5 billion lease on a hole in the ground."

Telstra executives should be "doing cartwheels" for reaching a preliminary agreement to lease a "hole in the ground" to NBN Co for billions of dollars, according to the leader of the Nationals in the Senate, Barnaby Joyce.

In a biting tirade against the Government, Joyce said the $11 billion agreement announced yesterday was "a brilliant deal for Telstra."

"No wonder Telstra is happy," Joyce shouted.

"Telstra should be doing cartwheels, cartwheels about this deal because they [retain] ownership [of the passive infrastructure].

"What we're doing is just handing money to Telstra. They get a $5 billion rent on their ducts.

"We don't own them. NBN [Co] doesn't own them. Telstra retains ownership of them.

"It's a brilliant deal for Telstra and they get to lose the universal service obligation - they can flick that one out the door. The protections that we put in place, they can flick that out the door. Protections gone, money's in, debts gone up, its a typical Labor deal."

Joyce said that the long-term arrangement amounted to "leasing a hole in the ground".

"You're leasing a hole in the ground and the rent's going to cost you 5 billion dollars," Joyce said.

He also said that handing the universal service obligation over to the newly-created USO Co amounted to "privatising the guarantee to look after Australians".

"[The Government] know when to privatise something," Joyce said.

"They privatise responsibility, that's what they privatise. They privatise public responsibility."

Barnaby: Telstra execs doing cartwheels over NBN Co deal

13 comments in this discussion

"Sydney, I couldn't agree more with you. It makes perfect commercial sense for NBNCo to pay Telstra $9b for access to pits, ducts, backhaul and exchanges to save $8 billion worth of overbuilding ..."

By umbria

Tags

cartwheels, telstra, barnaby, joyce, senate, nationals, nbnco, government, broadband, agreement

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Comments: 13

johnpro2 Jun 22, 2010 8:22 AM	The problem with anything Barnaby Joyce proclaims is "is it for real" He has so little technical credibility that you would have to get sveral genuine savvy commentators to second anything My Joyce says before even beginning to mull it over. Jp
deonast Jun 22, 2010 9:14 AM	I must admit I also have a problem with renting passive infrastructure (ducts and holes in the ground) from telstra. I thought the idea was to eliminate Telstra from the wholesale side of things. Telstra leasing to NBN Co gives them a little bit more involvement than I'd feel comfortable with, I'd have preferred an outright buyout of those assets. I guess we won't know the details until they are worked out it is early stages. Anyone know who owns the land these ducts and passive infrastructure is in, I would have thought it was council or RTA owned land depending on location. Do they get a cut?
Digger11 Jun 22, 2010 9:35 AM	Joyce is correct.
anonymous Jun 22, 2010 11:15 AM	It's a bit rich for the journo who wrote this story to posit that Joyce "shouted" these comments. Leaving out the shock-horror approach, it does in fact seem that Joyce (and Digger) are right.
ITrant Jun 22, 2010 12:53 PM	I almost admire the government for trying to wrest a modicum of control over the nation's telecommunications infrastructure from Telstra. They were never going to succeed. They threatened breaking Telstra up, but didn't have the stomach to follow through. Australian governments have spent decades turning Telstra into the monster corporate monopoly is has become. Undoing that will not be easy or quick. The NBN is an opportunity, but a government that doesn't believe in public ownership of public infrastructure is always going to fail. Vote Greens and independents.
mad1k5 Jun 22, 2010 2:12 PM	What Joyce doesn't understand is that Telstra doesn't look after the Last Mile anymore, that was the majority of the complaints. Sure Telstra gets to keep the ducts and so on, but that doesn't mean anything, it's pretty normal in situation like this around the world to lease infrastructure on long term agreements. For NBNCo to handle USO now will be the government responsibility for the time being, the USO can be updated with relative ease to handle further changes in regulatory and technology sides. Best for both worlds.
Tom Brown Jun 22, 2010 6:57 PM	I see that, what the writer of the article and Senator Joyce left out what they should know. Telstra owns that hole! In fact much more than the hole and they guard it jealously especially the last mile. This has been the biggest problem all along. For those who do not know, it is why Optus cable is ariel and that Optus or anyone else do not service the same side of the street as Telstra. Telstra owns it and Optus could not use it. So the article and comments are aimed at misleeding people, I do not believe you do not know this!
Pilotyoda Jun 22, 2010 7:37 PM	I still have a problem with this. Constantly paying Telstra for the ductwork when they should have been purchased as part of the deal. After all, Telstra will be purchasing capacity on the NBN just like the other retailers. Gives them yet another unfair advantage over their competitors. The really offensive part of the deal is the distinct possibility is the possible subsequent privatisation of the whole thing after the job is done. If it is such a good deal, why haven't any potential owner build it from scratch without waiting for buckets of public money to do the job for them with no commitment If the NBN Co. service obligation is effectively a separate private concern, I forsee the potential for disaster for business, individuals and those dependant on the communications system should there be a failure. There would be no accountability as the USO seems to be separate from the actual infrastructure. Good grief!
mad1k5 Jun 22, 2010 7:48 PM	@Pilotyoda, I disagree. Leasing is normal throughout the Telco world. In regards to privatization, thats why you need to push for parties like the greens who are against privatization: http://www.computerworld.com.au/article/350436/support_accelerates_against_nbn_co_privatisation/ ""We've got the larger fraction of the non-Telstra industry on board with the idea of a public interest test and a vote in Parliament before we sell it down," Greens senator, Scott Ludlam, told Computerworld Australia. "That's really what we're asking for, we can't prevent a future majority in Parliament doing whatever it likes, but we can put some safety nets in there."" Re: The USO is still there, it will be handled by USO, funded partly by the government.
mad1k5 Jun 22, 2010 7:49 PM	I should say not USO, but USOCo.
Tom Brown Jun 25, 2010 3:05 PM	Pilotyoda to clarify. The Government do not have the right to put comms ducts underground. This had been handed to Telstra decades ago. So without Telstra's approval no one else may put underground cable. Even no arial where there is Telstra. This has been removed in greenfeild(new) estates but again Telstra refuses to allow alternative providers connection to their infrastructure ie the trunk and distribution network. ALL aspects of Telstra's approach is protective of their monopoly. The NBN is the best solution at breaking Telstra's stranglehold.
sydneyla Feb 10, 2011 2:35 PM	Sadly there are two types of people who Post here to denigrate Telstra. Barnaby Joyce displays his ignorance and hatred of any program presented by the Labor Party, and those who disparage Telstra in the hope of gaining advantage for themselves. Telstra now owns the Ducts which will greatly advantage the NBN roll-out, do those charlatans mentioned above expect the Government to make unlawful acquisition of Telstra Plant and Equipment without payment?
umbria Feb 10, 2011 3:32 PM	Sydney, I couldn't agree more with you. It makes perfect commercial sense for NBNCo to pay Telstra $9b for access to pits, ducts, backhaul and exchanges to save $8 billion worth of overbuilding (which would have been time-wasting and stupid) and to smooth the way to turn Bigpond copper customers into Bigpond fibre customers over time, guaranteeing wholesale revenue from that large customer base. Telstra could not have agreed to this without the USO also being lifted from it, which will cost the government $2b. Telstra is relieved of copper maintenance costs and the USO and free to pursue lucrative revenue such as from the new Foxtel broadband deal with its 120,000 T-Box customers (as their bandwidth comes up to support it). As I predicted last year, Telstra's share price will double when the NBN deal is approved by shareholders.