Internode Boss Slams Telstra Over NBN Tender

Internode managing director Simon Hackett has reiterated his call for the Federal Government’s planned National Broadband Network to use competitive tension to deliver affordable broadband for consumers.

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Responding to Telstra’s National Broadband Network (NBN) submission, Hackett said ongoing consumer benefit required the retention of ADSL-based broadband services beyond the transition period to the planned Fibre to the Node (FTTN) system.

In Telstra’s NBN submission, it proposed that the Federal Government should not force the National Broadband Network operator to “accommodate old and new technologies, which are not compatible”.

Hackett, whose company is part of the rival Optus-led Terria NBN consortium said Telstra’s “incompatibility” claim was not based on technical data. “The ‘old’ (competitive ADSL2+) and the ‘new’ (Node-based VDSL2) services are in fact technically compatible,” he said.

“With appropriate software configuration settings, ADSL2+ can coexist in the new VDSL2 environment. To claim they are not compatible is a Telstra excuse that is driven by its target profit levels rather than consumer outcomes”, he said.

“The NBN is a potentially disruptive change that has the potential to increase costs for consumers by undermining competition, so a “hybrid” model – where ADSL2+ services compete with the NBN’s FTTN service – is desirable to ensure that the market drives consumer benefit rather than just rely on regulation”.

“Telstra’s demonstrated track record of advantaging its own retail operations over services offered to its wholesale customers should cause concern to legislators. Telstra could comply with the letter of the law – by providing access seekers with ‘core wholesale services’ running at 12 megabits per second, as specified in the NBN proposal – while its own retail operations take advantage of ‘non-core’ opportunities such as faster services running over the network.

“Retaining access to competitive ADSL2+ services nationally is clearly the way to ensure that competitive tension remains in the marketplace, so that the NBN doesn’t just result in consumers paying higher prices for services they already obtain from broadband providers today.”

“The hybrid approach is the most pro-consumer approach to building the NBN,” said Hackett, adding that “This isn’t about handing anyone a monopoly on a plate: It is about maximising consumer outcomes and choice as the priority.”