Telstra says regulatory uncertainty is costing them

Changing the regulatory framework of the telecommunicationsindustry is needed quickly says Telstra which claims the regulatoryuncertainty is costing it the deployment of its next-generationnetworks, while at the same time providing a leg up for itscompetitors.

Speaking at a competition summit organized by the Service ProvidersAssociation, (SPAN), of which Telstra is a member, Telstra’sgeneral manager of regulatory affairs, Tony Warren said that whilethe telecommunications industry has changed rapidly sincederegulation, the regulation of the industry has not.

Telstra, he said, was pushing for changes to the regulatory processbecause it was being unfairly treated under current regulations.

As an example, he cited the disparity in Australia’s CBDs wherefiber, which is supplied by a number of carriers, rather than theTelstra-owned ULL (unbundled local loop) dominates the landscape.”If the telco regime has some kind of discipline those areas won’tbe regulated.”

Regulation needs to be modified so that it does not “choke off”investment, he said. Additionally, regulation should apply tolegacy networks rather than new services.

A bone of contention for Telstra is the fact that in most capitalcities an alternative to the ULL, in the form of Optus’ HFC networkalready exists. Sydney and Melbourne, for example both have morethan 80 percent penetration of Telstra-alternative networks to thehome.

However, Telstra is still forced by the Australian Competition andConsumer Commission to charge low prices for competitors to accessits copper wires.

“In the CBD and metropolitan areas there is a real alternativesupply… which is winning customers in the marketplace.

“Pretending that it is not [competitive] and needs a highregulatory environment is not justified,” Warren said.

Optus’ Paul Fletcher said Telstra was doing its bit to killcompetition.

Raising the fixed line cost of the ULL was one measure.

He also said Telstra’s intention to deploy Fiber to The Node (FTTN)is part of its attempt to discourage investment in the ULL, whosecopper lines need constant maintenance.

Fletcher said Optus believes in increasing bandwidth options tocustomers, but that the ULL should be protected. “There is stilllife in it.”

According to Warren, Telstra needs to invest in FTTN because only40 percent of residents in cities live within 1.5Kms of anexchange, thus precluding them from access to very high speed DSLbroadband. The closer residents are to exchanges, the easier accessto speed of 10Mbs and above becomes. According to Telstra, the onlyother way to get the remaining 60 percent is to use fiber.

However, due to “regulatory uncertainty”, Telstra has been forced,Warren claims, to put a hold on its plans to roll out its FTTNbroadband network. For Dennis Muscat, CEO of Pacific Internet, thediscussion about connection is not the key issue. “It’s the service[VOIP, mobility, video-on-demand and the like] that hang off thiswhich is key. Most of which are not realized today.”

To achieve this, he said service providers like Pacific Internetneeded fair access to the network, fair pricing, and a fair amountof time to help build themselves up so a “quasi monopoly (ofTelstra and Optus) does not manifest itself”.

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