Original URL: http://www.theregister.co.uk/2011/04/11/overbuild_threat_drove_nbn/

Overbuild threat drove NBN decision: Conroy

ABC's Four Corners summarises the history of a venomous debate

By Richard Chirgwin

Posted in Networks, 11th April 2011 22:54 GMT

Australia could have had privately-built high-speed FTTN broadband, but for the roadblocks put in place by its incumbent carrier, according to an in-depth investigation into the history of the National Broadband Network by ABC programme Four Corners.

Prior to the global financial crisis, successive Australian governments had fielded various proposals to support a national broadband infrastructure built by the private sector. These had run into various problems both of funding and of regulation.

According to the Four Corners report, Telstra was the roadblock to the development of a fibre-to-the-node (FTTN) network in Australia. If it was to build a network itself, it wanted both government support and protection from competition. If the government had mandated FTTN on Telstra's network, it would have had to compensate the carrier for appropriating its property.

"No expert in the field, nowhere in the legal field, commercial field, would give us a suggestion that the sort of bill you'd pay to Telstra was anything less than $15-20bn," Senator Stephen Conroy, minister for Broadband, Communications and the Digital Economy, told the programme.

Had the government done so, it would still have a network under threat of an overbuild by Telstra.

"The government could spend $15bn to build a fibre-to-the-node network, pay $15-20bn to Telstra for compensation, and then Telstra could take that money and build a fibre to the home network past you and strand 70 per cent of $15bn on the side of the road," Conroy said.

Now safely in America, former Telstra executive Phil Burgess agreed with Conroy's assessment, saying "that's the way competition works. The only way it'll be stopped is if they have laws that prevent it".

Those laws passed the Australian parliament this year. ®