Labor kicks Telstra into action over ADSL2+

Telstra announced an upgrade to its ADSL2+ broadband services, after the Government made clear it did not consider a compelling case had been made for regulating third-party access to the service - an assurance sought by Telstra for more than one year.

In a letter to Telstra describing the Government's approach, Minister Conroy said, "[Because] Telstra is in a position to enable ADSL2+ in a number of exchanges across Australia, in metropolitan, regional and rural areas and I would welcome a decision by Telstra to switch on ADSL2+ services in as many exchange areas as possible. Switching on these services would benefit the national interest, delivering significant economic and social benefits to Australian consumers who cannot currently access high speed broadband."

Telstra’s CEO Sol Trujillo, responded by saying, "regulatory forbearance will be good for consumers because it permits the rapid deployment of broadband; good for shareholders because Telstra will not be forced to re-sell to competitors services they can provide simply by choosing to invest their own capital; and good for the nation because it encourages investment and facilities-based competition.”

According to David Kennedy, research director at Ovum, for over a year, Telstra has refused to turn on ADSL2+ services outside the footprint of its competitors networks, for fear that the ACCC would force Telstra to provide access to ADSL2+ resellers in areas where Telstra held a monopoly.
But after a written guarantee from the new Labor government that this would not happen, Telstra has announced it will activate ADSL2+ services across 900 exchanges covering 2.4m households.

Kennedy believes the announcement is important because it means, “higher speed DSL services will be made available over a much wider area of Australia, because Telstra is the only provider of ADSL2+ infrastructure in many areas. This supports the new government’s objective to accelerate broadband growth.”

It also signals a new policy activism from the government.

“The previous government was content to allow the ACCC to manage issues around infrastructure access, and resisted attempts by Telstra to go over the ACCC’s head,” said Kennedy. In contrast, the new government is determined to promote wider access to fast broadband, and is prepared to directly address some of Telstra’s concerns to achieve this result. The focus is on outcomes, not processes.

Kennedy believes, the fact that Telstra felt compelled to seek this government assurance, and that the government responded, could reflect a new and more positive relationship between Telstra and the government.

Telstra will activate the following new ADSL2+ services; 370 telephone exchanges serving nearly 1.8 million premises will be upgraded within seven working days - within the first 48 hours exchanges will be upgraded serving nearly one million premises in locations such as Alice Springs (NT), Banora Point (NSW), Buderim (Qld), Deer Park (Vic), Kalgoorlie and Karratha (WA), Newtown (Tas) and Victor Harbor (SA); and within seven working days exchanges will be upgraded serving locations such as Ayr (Qld), Aldinga (SA), Mittagong (NSW), Lakes Entrance (Vic), Sandy Bay (Tas) and Madjimup (WA); 132 telephone exchanges serving 230,000 premises will be upgraded within three weeks - serving locations such as Loxton (SA), Tully (Qld), Narromine (NSW), Camperdown (Vic), Howard Springs (NT), Smithton (Tas) and Yanchep (WA); An additional 405 exchanges serving more than 330,000 premises will be upgraded within 200 days as Telstra completes additional work - serving locations such as Grovedale (Vic), Tumbarumba (NSW), Barcaldine (Qld), Ceduna (SA), Forrestdale (WA) and Cambridge (Tas).

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