G9 plans FTTN for Australia without Telstra

Telstra pulling the plug on its FTTN network on Monday does not mean it's the end of FTTN in Australia. Rival fibre consortium, G9, will continue to move forward with its network plans without Telstra's help.

The G9 consortium, led by Optus and comprised also of AAPT, Internode, iiNet, Primus, Macquarie Telecom, Powertel, Soul and TransACT, last month unveiled plans for an alternative FTTN network that would be built and run under an independent umbrella company named SpeedReach. The network that will facilitate access to increasingly popular technologies like IPTV, Video-on-demand, interactive messaging and other high bandwidth applications is estimated to cost $4.1 billion.

While Telstra's participation in the move to FTTN would have enabled the G9 network to reach a much wider range of consumers, G9 will continue to pursue a smaller network without the telecommunications giant.

"Telstra's not the only telco in the world," said iiNet's regulatory affairs general manager Stephen Dalby, adding that Telstra would, of course, be welcome to join in the consortium's FTTN plans if only they would "swallow their pride" to do so.

"The more players the better," he said, speculating that other telecommunications companies such as British Telecom may yet jump on the G9 bandwagon.

Dalby is of the opinion that the outlook of the telecommunications industry has become more positive since Telstra has pulled out of its FTTN plan.

"We were [previously] on the outside; we weren't involved in what we feel is an important part of the industry," he said. "Now, with G9, we're part of the process."

However, this process will take some time. G9 is currently at the stage of figuring out how the project will be financed, and it may be months, even years, before FTTN plans finally come to fruition.

"It's a bit premature to talk about the exact services that will be offered," Dalby said. "We're looking at this as a once in a hundred years type of decision; if we were to replace copper with fibre, it should not be at the decision of one company in place of the entire industry."

An important aspect of G9's plans is that whoever owns the network will not have a retail arm, Dalby said. G9's approach to FTTN will be that of access seekers rather than access providers, resulting in a network that is easy and flexible for ISPs.

"We want to design it for anyone to have access to it," he said.

But in light of Telstra's own problems with the cost of deploying a FTTN network, and the difficulty of recovering such a cost under current ACCC regulations, Telstra remains sceptical of G9's success.

"If you look around the world it is hard to find very many examples of successful consortiums of this kind," Phil Burgess, Telstra's group managing director for public policy and communications, said at a press conference on Monday. "I think if the G9 can do this at a lower cost, they ought to do it, and if they succeed in doing it, then we will be first in line to be access seekers."

Meanwhile, Paul Brooks of Layer 10 Consulting believes faster broadband should already be available to a large proportion of Australians - if only Telstra would lift their administrative 1.5Mbps limit on their existing ADSL network.

"[Telstra] could provide 6 to 8Mbps or more to the majority of people in its coverage area today, with little more than a flick of a software switch," he said.

"In areas where they have installed ADSL2+ capable equipment they could potentially provide much higher speeds with the existing network, as is being demonstrated by many of the smaller providers already."

One of these smaller providers is Internode, which has been offering 24Mbps ADSL2+ since April last year. Citing the widespread availability of ADSL2+ as proof, Internode's managing director, Simon Hackett, went so far as to call Telstra's FTTN negotiations a "farce [with] little or nothing to do with consumer benefit".

"Telstra has limited its own retail customers to 1.5Mbps on copper lines that its competitors continue to demonstrate to be good for up to 24Mbps," he said. "Its own customers have been held to ransom by its political posturing for this entire period.

"Perhaps Telstra would care to sell its copper line network to the G9, so that it can be upgraded and maintained in the future by a consortium that puts consumer benefit ahead of whinging that the regulator said that it can't have a pony."

But Burgess suggested that Telstra is being treated unfairly by regulations and by the public's constant criticism of Telstra's position in the telecommunications industry.

"Nobody gets upset with Macquarie Bank or with Woolies or with anything else when they are successful, but if we get to be very successful we have people say, 'that's an unreasonable return'," he said. "Well, our view is that our shareholders want us to make large returns, they want us to be very successful, and that's what we intend to do."

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