I am writing in response to comments from Communications Minister Stephen Conroy, reported yesterday in CommsDay, specifically: “If there’s a problem there then that should be rightfully taken up with the ACCC, but there is nothing stopping any of the competitors to Telstra accessing the exchanges and putting in the DSLAM technologies to create the competition.”
I sincerely wish that the above was true, but alas, it is very far from the truth indeed. There are problems and they are indeed being taken up with the ACCC right now.
The relative success of competitive ADSL2+ infrastructure builds in Australia tends to obscure the reality here: That the extent and vitality of infrastructure based competition would be far greater and geographically far more widespread if Telstra were not obstructing declared service access in many ways, on a continuing and worsening basis. Today it is a mere shadow of what it could be. It behooves the government and the regulator to appreciate and to act on these issues of infrastructure access blockage, to put their actions in sync with the rhetoric that suggests that infrastructure based access is working as it should.
To be more specific, in respect to the statement that “there is nothing stopping any of the competitors”, here are just some of the highlights of the laundry list of things that are stopping competitors today:
* Serialised (one at a time) access to exchanges to construct or expand ADSL2+ infrastructure, leading to access delays of up to 24 months (in our direct experience) in being able to access key metro exchange areas. A delay of up to 24 months (and routinely in excess of 6-12 months) in an ADSL2+ market that is scarcely older than that in total, is clearly a barrier to competition! BigPond doesn't have to wait in the same queue - as we have seen last week, it can achieve for itself, in 48 hours, what it makes competitors wait up to 24 months to achieve.
* An increasing number of exchanges being self-declared as full (the Telstra terminology is ‘capped’) for Access Seekers. However, BigPond doesn’t seem to be suffering from any access problems in these very same exchanges. As a result, inner metro exchanges serving hundreds of thousands of customers are now places where BigPond has effectively re-monopolised access to ADSL2+ services.
* Untenable data backhaul prices from the monopoly backhaul provider (Telstra) in regional areas (where not even Telstra would have an economic business case, today, to re-build the monopoly fibre paths it has the advantage of owning) mean that infrastructure based competition is economically impossible in most of the regional exchanges being switched on by BigPond this week. I note that iiNet filed an access dispute on these regional transmission cost issues more than 18 months ago with the ACCC, and to date it is still awaiting substantive action from the ACCC about the issue. If this backhaul cost issue was bad before, surely it’s a critical device of ‘stopping competitors’ now!
* The continued refusal of Telstra BigPond to participate in its own industry-wide ADSL2+ churn mechanism called Single Service Transfer, let alone the nonexistent churn mechanisms between ULLS and LSS services also add further barriers to effective and open competition. This is by making the transfer of customers to and from BigPond ADSL2+ into an expensive exercise with imposed downtime for consumers that acts as a strong disincentive to changing providers. If the Government can act to force banks to make inter-bank loan transfers smoother, surely it can act in a similar manner for the smoothing of broadband customer change.
The new tune being sung in last week’s media releases in general from both the Government and Telstra is that it’s OK for Telstra to make the software upgrade to switch on ADSL2+ without Telstra Wholesale offering reciprocated upgrades to its existing ADSL1 wholesale offerings.
This only makes sense if the access barriers and monopoly backhaul cost barriers to the efficient use of ULLS and LSS services are cleared away - and if this is done rapidly and with regard to the full spectrum of access barriers, not just those noted above.
Finally, these issues have substantial importance in terms of the upcoming FTTN proposals and the manner in which the Government supports the winner of the FTTN process.
Is the government prepared to commit to preserving the ULLS and LSS access regimes in the presence of FTTN? Or are competitors being asked to aggressively invest via ULLS and LSS into an economic dead end? The industry needs direct clarification of the timeframe in which it can expect to gain a return on its ULLS and LSS based investments, or alternatively, it requires a clear statement of the compensation approach to be offered to the industry if those access paths are to be cut off by the deployment of FTTN in the future.
Simon Hackett Managing Director, Internode
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Biassed reporting
Simon,
Your personal and business imperatives are showing.
I would be far more impressed with the rhetoric if it had come from somebody with a bit less personal stake in the issues than yourself. As it is, I have discounted a lot of what you have said on the basis that you are of course pushing your own barrow.
It's a pity, really, as I'm sure that some of what you say is probably correct, but given your stated position, I can't tell which is, and which is just puff.