Federal Government slammed for killing Telstra FTTN

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Federal Government slammed for killing Telstra FTTN

Telstra has blamed the Trade Practices Act for stalling a “multi-billion dollar upgrade” of its fixed network to fibre-to-the-node and for killing off network investment in Australia generally.

In an address to the National Press Club in Canberra today, Telstra's group managing director for public policy and communications, David Quilty, launched a sustained and stinging attack on the telecoms competition regime which sits under the Act.

Quilty outlined a laundry list of alleged deficiencies with the regime.

These include that "it is inefficient, doesn't produce timely outcomes, isn't grounded in clear economic principles, vests virtually unparalleled discretion to the regulator... [and] discourages major capital investment in network infrastructure".

He also directly blamed the regime for stifling Telstra's investment in fibre-to-the-node (FTTN) technology.

"For three-and-a-half years, Telstra has been unable to progress a multi-billion dollar upgrade of its fixed network to fibre-to-the-node because the regime prevents us from securing the regulatory certainty to make such a major investment," Quilty said.

He inferred that the regime encouraged Telstra's competitors not to invest in their own infrastructure.

"The regime incents Optus to purchase access to Telstra's network rather than to use its own cable network in Sydney, Melbourne and Brisbane," Quilty said.

"Why? Because it's easier, cheaper and less risky to purchase from Telstra than to invest in competing infrastructure.

"The build versus buy balance is seriously out of kilter at a time when Australia desperately needs this infrastructure," he said.

Quilty said that Telstra would this week lodge a submission to the Productivity Commission's annual review of regulatory burdens on business.

The submission "will detail Telstra's proposals for overhauling the telecoms regime, including the design principles for establishing a more pro-investment system of third-party access", he said.

Quilty also indicated that talks with the Australian Competition and Consumer Commission (ACCC) over how access prices to Telstra's network are set had recently broken down.

He said both Telstra and the ACCC had created models to calculate the costs.

"Telstra has spent nearly $3 million on what we believe is a world-leading model, but the ACCC is clearly indicating it will reject Telstra's model and, instead, rely on its own," Quilty said.

"Telstra has proposed that both models be independently scrutinised by the world's leading network modelling experts.

"Our requests have fallen on deaf ears and we now have little choice but to organise scrutiny ourselves.

"In coming weeks, we will pursue a range of avenues of accountability to facilitate a credible outcome on this crucial issue."

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