Telstra’s land-grab opportunity

A couple of weeks ago, Twisted Wire looked at Project Top Hat, with Telstra rolling out DSLAMs above RIM cabinets. It fixes a broadband blockage problem, but prevents exchange-based infrastructure competition.

This week, I look at what will happen if Telstra extends the project and starts rolling out fibre-to-the-node (FttN) VDSL services, meeting the public’s thirst for speed but isolating competitors’ DSLAMs in the process. Australian Competition and Consumer Commission (ACCC) commissioner Ed Willet doesn’t see a problem, because existing regulatory controls require such investments to be open access and sold on at NBN Co prices. He adds that with the National Broadband Network (NBN) on the horizon, such a move by Telstra is highly unlikely.

The opposition, of course, is keen to see an end to the NBN in its current form, with infrastructure competition key to its policy. Would the ACCC be as satisfied that the regulatory controls are in place if there is no NBN on the horizon? Surely, structural separation of Telstra becomes a pressing need.

I asked Paul Fletcher, federal Liberal MP for Bradfield and former advisor to Senator Alston, whether they can really push ahead with their plans without splitting up Telstra first. Currently, separation comes through the build of the NBN. Without it, Telstra remains the vertically integrated dominant player of old.

In its current form, with a change of government, Telstra could use the uncertainty around policy as an opportunity for selective investment and a land grab for high-speed broadband customers. In fact, with their upgrade of the HFC network and their Top Hat project, hasn’t this land grab already begun?

First published on ZDNet

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