iiNet signs to South Brisbane

iiNet has signed an agreement with Telstra that will see its customers migrated from copper to fibre-serving areas in the suburbs south of Brisbane over the next 18 months.

Similar agreements had been signed with a total 32 service providers to date, allowing the companies to resell Telstra's Fibre Access Broadband product to approximately 11,000 premises in the South Brisbane area.

However, chief regulatory officer Steve Dalby maintained the agreement was signed "under duress" and only after a "lengthy and difficult process with the incumbent".

"The agreement is unsatisfactory and is signed with the knowledge that we have no choice, given Telstra's massive power and the option of 'sign before we cut your customers off'," he said in a post to the Whirlpool user forum yesterday.

The copper migration, due for completion by the end of 2012, had been split into 17 'tranches' of approximately 600-700 premises each.

To date, technicians had begun rolling out fibre to two of the tranches, with expectations copper in each area would be cut off three months after the area was deemed fibre-ready.

The migration had become a sticking point for service providers iiNet and Internode, who argued the migration was symptomatic of "cherry-picking" areas for fibre rollout prior to the NBN.

They maintained the Fibre Access Broadband wholesale product sold by Telstra to third parties offered three speed tiers completely different from those offered under the NBN, and lacked many of the services relied on by service providers to differentiate, including multicast and quality-of-service.

The wholesale pricing, too, meant Telstra Retail was in many cases undercutting rivals, with users often reluctantly switching to the incumbent purely out of economic concern.

Internode managing director Simon Hackett recently said the South Brisbane area was being "rapidly locked into the vertical monopoly past".

Other ISPs were concerned the area was a foundation for fears Telstra would continue to close exchanges without consulting the wider industry.

Hackett said he hoped Telstra's proposed interim equivalence measures to the competition watchdog, part of its structural separation undertaking, would relieve further fear of a price squeeze on all areas where Telstra maintained a wholesale monopoly.

However, Dalby remained reticent about caving to Telstra on the issue.

"Telstra simply refuses our request for equivalent services [in South Brisbane] to those available over the regulated copper," Dalby said yesterday.

"This is a clear example as to why Telstra must never again be allowed to operate the national telecommunications infrastructure."