Telstra still fired up as FTTN remains on hold

While ever regulators "pillage" the backpockets of Telstra shareholders, the chances are slim that the telco will rollout a high-speed broadband network.

Telstra's head of public policy & communication, Phil Burgess, still fired up after last week's decision to pull the plug on its proposed $4 billion FTTN rollout, said satisfying shareholders - many still reeling from the share slide to below $4 after sitting at more than $7 at the time of T2 - was the company's number-one concern.

Investing billions of dollars, and then have the ACCC "give" away that competitive advantage to competitors was not the way his company did business.

"We are not going to be coerced into building something to the detriment of our shareholders," he said at a broadband conference in Sydney on Thursday.

Asked what he thought about the future of Telstra FTTN network, Burgess said it was dead. But ultimately - and smiling to his audience, CEO Sol Trujillo has final say, and he has said the project is currently in a "dormant" stage.

"The fact is we really made a lot of progress with the ACCC. It is beginning to see the regulatory regime for the POTS [plain old telephone network] doesn't work for the PANS [pretty amazing new stuff]."

Burgess said Telstra agreed with the ACCC on the high-speed access service and on the issue of capital. "We ran up on the red light on the issue of costs."

He said the ACCC had a different policy to the one held by the government, which is one of a national uniform price, regardless of where people live.

"Our policy is the same [as the government]. Everyone should pay the same price."

Burgess cited ACCC figures which suggested that the cost of access to the fibre network for people in the city should be $7; the inner ring $17.70, $35 for outer metro; and north of $150 for people n the rural areas.

"The problem is not us versus the ACCC it is that the ACCC is not following the policy of the government, which calls for uniform pricing.

They wanted us to price FTTN in a way that would not allow for the cost of rolling it out to the bush."

ACCC chairman Graeme Samuel acknowledged last week that Telstra could not reach agreement with it on the extent of cross-subsidies by urban consumers to finance the rural and remote deployment.

"But at no stage in the discussions has Telstra ever proposed that its FTTN network would be rolled out to rural and remote Australia.

"Further, the ACCC does not agree with Telstra's claims that there is an irreconcilable conflict between government policy on universal services and the ACCC's approach to access prices. In the ACCC's view, both are compatible with ensuring that Telstra's investment achieves a commercial return."

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