In a damning report recently conducted by the Centre for International Economics it was revealed that a Telstra built and managed National Broadband Network would burden the economy by lowering wages, increasing inflation, reducing national growth and raising broadband prices by 15% in which our nation would be $897 million worse off.

Telstra was quick to reply by dismissing the report as ‘bogus’ although Telstra Wholesale managing director ‘Kate McKenzie’ failed to note a crucial sentence in the report that read “However, obtaining precision is not the main objective of this analysis. The main point is to show that it is likely that a significant margin exists between Telstra’s required return from the FTTN network and the return that an alternative supplier would require for the same asset, and this margin will translate into hardship for the economy and the community.”

Report Conclusions:
- Australian consumers and the economy would be $897 million worse off under a Telstra owned and operated National Broadband Network;
- Telstra’s targeted return on its capital investment was relatively high and “may be consistent with the abuse of market or monopoly power”;
- The build-cost scenarios for Telstra’s broadband network would increase inflation, reduce national growth, lower wages and reduce national consumption;
- The impact of Telstra’s network would “lead to a general contraction of the Australian economy.”

source: itwire.com

The results are in!  A recent Australian Broadband Survey Report conducted in 07/08 stated that more than 50% of respondents clearly voted for the Government as the entity who should be behind the next generation internet access network (FTTN). Other significant results include: Most people suggesting that Broadband prices are just too high and would be greatly influenced to change ISP’s for a lower price, higher download limits and faster line speeds. The demand for VoIP is on the up and most Broadband customers are still very unhappy with the ability of ISPs to change ‘contract’ conditions at any time.The survey was conducted over a 4 week period (31.12.2007 to 01.02.2008) with 17,881 verified participants taking part.

Below are several examples of the feedback obtained in this years ABS that perhaps both Business (ISPs) and the Government should pay close attention to.

Which entity should be responsible for the next generation internet access technologies (e.g. fibre to the node)?

Telstra  5.7%
G9 consortium  21.4%
The government  51.9%
Other (e.g. Deutsche Telekom)  5%
Don’t know  16%


Do you support the government’s policy for mandatory ISP-level content filtering (opt-out)?

Strongly agree  2.9%
Agree  10.4%
Disagree  22.9%
Strongly disagree  51.5%
Don’t know  12.3%

From the following, what is most important for you in a broadband internet connection?

Fast speeds  39.2%
Ability to download large amounts  27.9%
It is always connected  14.9%
Lower service costs  11.7%
Low latency  3.5%
Frees up telephone line  2.5%
Exclusive content  0.1%

What would entice you to change ISP?

(ISP Average)
Lower prices 75.4%  
A higher download limit 56.7% 
Faster line speeds (e.g. ADSL2+) 50.4% 

See the full report here.

According to news just to hand, Telstra are currently evaluating the possibility of lowering Wireless Broadband prices. With rivals offering Wireless Broadband Plans substantially cheaper than BigPond, along with expected Wireless speed upgrades, Telstra may have no option other than to lower prices and or raise usage limits.

Broker Goldman Sachs JBWere also notes competition from wireless products could cut into Telstra’s fixed-line broadband offerings.

Telstra said it had 329,000 wireless broadband customers at June 30, 2007, but this number is expected to have risen significantly in the past six months.

In June, Telstra had a market share of around 47 per cent

Read the entire ‘Telstra has scope for cheaper broadband’ article at MISaustralia.com

The Australian Competition and Consumer Commission has rejected a G9 Proposal on Broadband pricing for a new fibre-to-the-node network. The main reason for doing so revolved around the unclear pricing that would come into play after the initial three year period was up. Although the proposal was rejected, the Optus led G9 consortium will still be able to revise the price undertakings and re-submit them to the ACCC for scrutiny again.

“We could not accept so much discretion from a gas, electricity or rail firm. Access seekers would not know where they stood,” said the ACCC.

More important in the ACCC’s response to G9 today was not what the regulator knocked back, but what it accepted – namely the pricing and the proposed vertical separation.

Read the entire article at BusinessSpectator.com.au

The G9 consortium, made up from well known ISPs’ such as Optus, Primus, PowerTel and Internode etc.., have stated that they can develop an Australian high speed broadband network and offer half the price that Telstra have proposed. Optus chief executive Paul O’Sullivan recently blasted Telstra as being ‘greedy’ after the Telstra CEO ‘Sol Trujillo’ stated that they have no intention in joining any type of joint venture with the Government.

A GROUP of nine telecommunications companies led by Optus and backed by investment bank Investec will offer high-speed broadband at half the prices proposed by Telstra – if it wins a $4.7 billion tender with the Rudd Government.

In an exclusive interview with The Weekend Australian, Optus chief executive Paul O’Sullivan said Telstra’s “greedy bid to maintain its monopoly profits” would slow Australia down in its bid to deploy 21st century telecommunications infrastructure.

Mr Trujillo confirmed that Telstra wanted to build the network itself and planned to charge an “average” access price of about $85 per month, giving Australia broadband prices among the highest in the developed world.

Read the entire article at AustralianIT.com.au

The Competitive Carriers Coalition (CCC) has strongly urged the Government to slash prices by up to %20 to save the economy from rapidly rising Inflation. The Industry group suggests that other developed countries are currently reviewing their competition standards and failing to follow suit would only see Australia fall further behind. In an article appearing on thewest.com.au, they further add, that Telstra is to blame with it’s monopoly on the Industry and inflated wholesale pricing.

“We pay more than just about every country in the OECD for basic telecommunications services,” Mr Forman said in a statement.

Mr Forman said an estimated, conservative reduction in charges to carriers of 20 per cent would save the economy $2.5 billion a year.

“At the heart of this problem is the inflated wholesale prices Telstra charges for access to its monopoly network and the inability of the ACCC to manage Telstra with the limited powers it now has.”

The Australian Competition and Consumer Commission has released it’s final declaration decision that will witness Line Sharing prices drop to a respectable $2.50 per service at the start of 2008. After several years at loggerheads with Telstra over LSS prices, the Telco giant succumbed to the Watchdog’s continual pressure and reduced pricing from it’s initial  $15 per month proposal in 2004, down to $2.50 per service. The pricing should be available to everyone and come into effect as from January 1, 2008 until July 31, 2009. A great decision all round for the Broadband Industry, competition, independent ISPs and the consumer.

“The ACCC’s final decision is to regulate the LSS on a national basis until 31 July 2009. Declaration of the LSS will be in the long-term interests of end users,” ACCC Chairman, Mr Graeme Samuel, said today.

“The ACCC’s final view is that regulation of the LSS will promote competition in broadband markets. This will allow consumers to choose from a wider range of broadband service providers, increasing their opportunity to gain a more competitive service-price offering.”

Read the entire ‘ACCC issues final decision on regulation of the Line Sharing Service’ announcement at the ACCC.gov.au

As the forthcoming Federal Election gears up a notch, Prime Minister John Howard says Aussie Broadband Speeds are OK, Labor talks $8billion dollars for new joint Network, and reports show Australia is lagging behind leader Japan with speeds 35 times slower. Howard says Broadband Internet speeds will be improved over the next couple of years, but it might be a case of too little too late. A recent report also suggests that we’re paying 9 times as much for our Broadband services compared to other countries. While the Libs appear to have dropped the ‘ball’ on Broadband, Labor commits to plans for developing a Broadband Network in conjunction with the Private sector which will pave the way for Broadband speeds 40 times faster than whats currently available.

Opposition communications and information technology spokesman Stephen Conroy says Labor wants to use the $2 billion Communications Fund to build partnerships with the private sector and roll out an $8 billion national broadband network.

Prime Minister John Howard has defended Australia’s broadband speeds.

“We are laying out speeds of 12 megabits per second for 99 per cent of the community,” he said.

Read the entire article at ABC.net