There is an interesting article written by financial journalist Alan Kohler on the battle between Telstra and Terria for the Government's National Broadband Network. He writes about Terria's battle to secure funding for their proposed build, and how senator Conroy's "Expert Panel" might see the two competeing bids. An interesting read if you have been following the progress of the RFP.

Alan Kohler @ Business Spectator

I am adding Australian broadband to the qgl wiki bandwagon area.

Considering a large number of members here are involved in the IT/Telco industry, this network should be of vital importance to all of us.

not to mention all porn users.

my take on it is this: i just dont trust some sort of investment group with such massive infrastructure that will have long slow take-up and return on investment windows.

they will be focused on servicing debt and distributing dividends. i like the singtel or telstra options because they will be using their own shareholder funds to a large degree and thus have personal investment in the project not just debt that turns into confetti when the project goes bust and they walk away.

a blue chip project owner is required for this job.

doesn't matter who wins the bid to build it, Telstra will build one regardless.

That is when the Terria plan falls down, because they are bargaining on winning a bid to create a monopoly where Telstra is forced to use the NBN they create and assist them in actually creating it. That isn't going to happen on both counts.

It then gets better for Telstra, since there is a competing infrastructure network to generate competition, they can then charge whatever they like for access to their own.

last edited by ara at 13:21:46 13/Aug/08

That is when the Terria plan falls down, because they are bargaining on winning a bid to create a monopoly where Telstra is forced to use the NBN they create and assist them in actually creating it.

What on earth are you talking about ara?

When the "G9" launched their SAU before the last election, they talked about overbuild protection for a number of years because they felt that they would require Telstra's wholesale business to make it viable. Since the SAU was rejected by the ACCC, Terria/G9 has not mentioned overbuild protection at all (as far as I am aware).

Telstra have repeatedly stated that if they did not win the RFP, they would either extend their HFC network or invest overseas. The latter an obvious threat to the Government.

It then gets better for Telstra, since there is a competing infrastructure network to generate competition, they can then charge whatever they like for access to their own.

Thats called "real competition". What everyone is looking for...


You seem to be missing the major issue... Structural separation.

If Telstra win the NBN, there will really be no improvement in competition over what we have in the current access regime. They have repeatedly stated that they will withdraw from the RFP if structural separation is a requirement.

I can't see why the Government wouldn't enforce structural separation - its Win/Win for the consumer, and at the end of the day, the Government should be looking for the best result for the consumer, not for Telstra or its shareholders or for Terria.

the Government should be looking for the best result for the consumer, not for Telstra or its shareholders or for Terria.

then why not introduce price controls on fuel and groceries and rental housing. that's all good for the consumer, right?

wrong, what's good for the investor is ultimately good for the consumer because the more investors the more capital gets constructed at the end of the day for overall public utility.

Considering the Government is contributing $4.7bn of our taxes to the project, I find it hard to believe they would be looking to give it to a company that has repeatedly defied regulation and continues to threaten the Government should it not bow to its demands.

In my opinion, I don't mind if Telstra win the RFP, but I do think it should be a requirement that stronger separation be implenented to protect the consumer and other competitiors in the industry. The Government

Considering Terria have signaled their intentions to implement a separated model anyway, they would be my prefered option.


Introducing price controls on groceries on rental housing and groceries would be good for the consumer. It is just not going to happen... Its not exactly a good comparison to what should be consindered a utility.

without me reading a whole lot of guff i don't want to... can someone explain to me what yas mean by 'structural seperation'?

keeping the retail arm (selling the services) separate from the infrastructure arm (keeping the network up, capital roll out etc).

similar to what happened with energex.

ahh, so superfluous middle-men cashing in on an essential service they didn't help to provide. check! ;D

i originally thought it might mean that a new telco was going to build it's own infrastructure seperate to telstra... which would be crazytalk.

ahh, so superfluous middle-men cashing in on an essential service they didn't help to provide. check! ;D

i originally thought it might mean that a new telco was going to build it's own infrastructure seperate to telstra... which would be crazytalk.

Structural Separation removes the incentive for the network owner to favour their retail arm unfairly and improves competition. Effectivley, the network owner would have to sell to a completely separate retail arm at the same price as they do to their competitors and with the same conditions.

last edited by mongie at 17:16:25 13/Aug/08