The Federal Government’s Australia Connected Expert Taskforce has issued a challenge to the industry to offer network proposals that exceed those already canvassed by Telstra and the G9—on terms that would likely be unacceptable to either of those potential bidders.
The Taskforce yesterday issued a 44 page set of draft guidelines with the industry given just three weeks to comment. It expects to select a winner within three months of the publication of the receipt of proposals, with bidders to be given 17 weeks to enter their proposals. This suggests a decision will be made no sooner than in 8 to 9 months time.
Telstra criticised the timetable yesterday with spokesman Jeremy Mitchell stating “we are surprised that the government wants to shuffle paper for a further eight months before making a decision to deliver a FTTN proposal. Telstra first put forward a high-speed broadband plan for Australia in August 2005, it seems that April 2008 is the earliest the government will make a decision.”
Highlight of the guidelines is the Taskforce’s specific encouragement to proposals that provide alternatives to the FTTN plans put forward by Telstra and G9. Also the Taskforce envisages that bids incorporate plans for major regional centres outside the state capitals.
“The Expert Taskforce is mindful that there has been public discussion about at least two proposals to improve broadband data speeds and their availability in parts of Australia by the deployment of fibre-to-the-node network architecture. The Expert Taskforce considers that such proposals fall within the Australian Government’s meaning of new high speed broadband network infrastructure. However, the Expert Taskforce has not formed a preference for this or any other particular technological approach and encourages proponents to put forward proposals based on the technologies they consider appropriate,” it said.
A similar national network contest in Singapore has elicited 12 proposals incorporating a number of technological approaches including fibre-to-the-home plans and a souped-up HFC network using emerging DOCSIS 3.0 and spectrum overlay technologies.
The Taskforce has reinforced its earlier preference for an open access network with services available on an equivalent basis to all access seekers. It adds “Consumers should face the lowest possible retail prices for services provided using the new network infrastructure. However, services need to be priced so they are economically viable.”
INTO THE REGIONS: The Taskforce also want bids that extend beyond the major cities. “Proponents should clearly indicate the extent to which capital cities and major regional centres will be covered by their proposed network infrastructure and services. Extent of coverage includes both the capital cities and major regional centres to be covered by the proposal, and the extent to which premises – residential, business and other – within these locations will be offered services.”
In a seeming repudiation of both Telstra’s and G9’s pricing proposals, it adds “Proponents should not, however, expect to be insulated from normal commercial risks associated with any private investment in network infrastructure (eg. lower than expected traffic forecasts, technological change).” Telstra has proposed higher prices than are currently commonly charged to insure it against risk, while G9 has proposed a complicated pricing formula that could see dramatic price changes if demand forecasts aren’t met.
Bidders will also be expected to make binding commitments and to also consider the potential for claims against the Commonwealth for compensation—a likelihood if a non-Telstra winning bid requires use of Telstra infrastructure.
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