Monday, July 04, 2011

The NBN and the USO

It seems mighty strange to me that Macquarie Telecom's Matt Healy and Optus' Clare Gill are only now labelling the Telstra/NBN/Government deal as "wasteful".

It seems to me that they were all welcoming the initial USO Co announcement without realising the implications for them, which had to be USO costs going up in the medium term.

As I noted in my iTnews column the risk was clear from the moment the Government announced the gap closing initiative in June last year.

The core of the current complaint is that Telstra is required to maintain any existing copper telephony for voice services in the 7% of premises not addressed by fibre. Healy assets the NBN services are "capable of delivering these essential voice services". Meanwhile the Optus GM for corporate and regulatory affairs continued with the nonsense that Telstra has already been compensated for its network.

Neither telco is showing any understanding of the politics. They just need to read the Glasson report to see the distrust in regional communities of satellite and wireless delivered solutions. It is worth noting that the Optus OPEL solution never proposed replacing the voice services. It is politically untenable to tell anyone in regional Australia that their existing copper service will be taken away and replaced by a VoIP over satellite or wireless.

The real issue is that the current NBN footprint will actually expand over the next ten years, not contract. There is no logical reason why every copper connected premise should not be fibre connected at a point in the future soon after the initial roll-out. These connections will probably be aerial along the electricity poles and much cheaper than modelling in the initial NBN business case. The deployment model will initially come about through self-help models.

But now is way too late for these telcos to complain about the shape of a deal announced a year ago. And I'm pretty sure I only heard encouraging words back then.

Novae Meridianae Demetae Dexter delenda est

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