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Turnbull gave NBN Co NO RULES to plan blackspot upgrades

NBN Co faces huge future Telstra bills and reduces fibre footprint

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Australia's Communications Minister Malcolm Turnbull has issued no specific guidance on how NBN Co, the company charged with building Australia's National Broadband Network (NBN), should target broadband blackspots.

In response to questions from The Register, the Department of Communications sent us the following statement it said had been approved by the Minister's office:

“The NBN Co will be primarily responsible for deciding which areas are commercially and operationally feasible to upgrade in the shortest timeframe possible. Broadband upgrades are contiguous in nature – that is, you can’t address every small island in Australia that is underserved at once but rather, have to build out a network from where existing assets are. That being said, the recent Strategic Review found that by giving priority to poorly served areas in the deployment schedule, they will on average be upgraded two years sooner than if no effort was made to prioritise them.”

The statement does not offer a direct answer to our question, which asked “Has the department developed criteria for NBN Co to use when assessing whether it is 'commercially and operationally feasible' to address a poorly-served area?”

The question is, we believe, important because addressing black spots was an issue on which Turnbull campaigned long and loud. But the 'commercially and operationally feasible' test has not been explained.

The Department's statement does offer a hint into how blackspots may be targeted. But to our mind the phrase “commercially and operationally feasible” is sufficiently vague that NBN Co could use as justification not to address a particular blackspot.

We've sent the same question the NBN Co, and gave it the same deadline, but are yet to hear back. Indeed, our request was not acknowledged as having been received until we checked.

Other controversies continue to dog the project. Yesterday, Comms Day revealed that Telstra stands to pocket $AUD88bn in rent for its ducts, conduits and other assets over the next fifty-odd years, plus another $10bn for other odds and sods.

ZDNet's reported on an internal slide from NBN Co that says only one fifth of NBN connections will use fibre to the premises (FTTP).

The first story shows that Telstra's copper-era infrastructure will remain a key asset to Australia's telecoms industry for decades.

As monopoly provider of much infrastructure on which NBN Co will rely, Telstra has no reason to be reasonable whenever NBN Co needs something done. It's got form in this department: in 2004 it infamously sold retail products at less than the price it offered to wholesalers, crimping competition nastily. And of course the existence of many broadband blackspots can be attributed to Telstra's past investment decisions.

Of late, Telstra hasn't displayed that kind of behaviour but assuming it has changed its spots is baselessly optimistic. Telstra's main duty is to shareholders, not NBN Co or Australia. It will play hardball again, sometimes at very tricky moments for NBN Co.

That FTTP will now make up only 20 per cent of NBN connections is also noteworthy, as it confirms that NBN Co is simply not thinking about working with fibre in the future, no matter what outcome the various reviews of the project suggest.

Turnbull has said he can issue new Statements of Expectations and will do so as the need arises. But it now seems certain no such document will suggest a return to optic fibre as the network's main carriage medium. ®

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