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Networking Australia Government The Internet

AU National Broadband Network Signs $11 Billion Deal With Telstra 120

An anonymous reader writes "The Australian government has signed an $11 billion deal with the country's largest telco, Telstra, to acquire the telco's physical infrastructure and migrate customers to the National Broadband Network. The NBN is a 100Mbps open access fiber network that will be rolled out to 94% of the Australian population, with wireless and satellite to cover the remainder. The deal marks a large step forward for the new network, as without a deal to bring Telstra's customers onboard, the NBN's viability was in question."
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AU National Broadband Network Signs $11 Billion Deal With Telstra

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  • by mrsteveman1 ( 1010381 ) on Sunday June 20, 2010 @12:54PM (#32632944)

    Everyone knows wallabies love to eat fiber

  • Yeah... (Score:4, Insightful)

    by kindups ( 1483627 ) on Sunday June 20, 2010 @12:55PM (#32632950)
    If this was a country other than Australia I'd think it was awesome. Now this just seems as a way to further invade the internet lives of their citizens. I sure hope people can still buy private internet, but I doubt they'll be able to.
    • Re: (Score:1, Insightful)

      by Anonymous Coward

      The involvement of Telstra with this is far worse than the government. How bad are they?

      Their Wikipedia page had to be locked because it kept being edited to read "They are a bunch of cunts"

      The majority of their customers are the elderly and uninformed, layovers from when they had a monopoly. They never inform customers of rate cuts or better plans.

      I found out recently my father was paying $270 a month plus call costs for his mobile - the same plan he had when he first got one of those suit case mobile phon

      • by smash ( 1351 )
        They ARE a bunch of cunts, but if you want reliable non-satellite service in remote locations, they are the only option unfortunately.
      • by rtb61 ( 674572 )

        The real reason for the Australian Government buy back. Well it seems the previous right wing political (Liberal as in Libertarian) heavily promoted the sale of the then government institution Telstra to foreign investors. These foreign investors would of course have been spitting chips at the idea that a new government wholesale (they provide the backbone) fibre network that would provide access 'at cost or very low markup' to retail isps which of course would cripple the now privatised telecom incumbent

        • You must also remember that the privatised Telstra, sitting on a monopoly of copper access and making huge margins from all of it, had no interest in allowing Australians access to cheap, high speed internet access, because this may in turn lead to the widespread use and adoption of VOIP, which in turn would devalue their copper monopoly.

          It makes solid business sense for Telstra to do everything they can to keep Australia on 56k modems.

    • The government would be able to do that anyway...

    • Re:Yeah... (Score:5, Informative)

      by smash ( 1351 ) on Sunday June 20, 2010 @09:21PM (#32636172) Homepage Journal
      All the NBN does is roll out the fibre for use by whatever isp or telco (they purchase/lease it off the government). The service provision is separated from the infrastructure.
    • Yeah, we're all really worried about that.

      Oh wait, no we're not.

      Are you worried that the government will find out where you drive to? After all, they built the roads. Are you worried that the government will track your eating habits? After all, they built the sewerage system.

      This is a public infrastructure system allowing ANY business to compete on a level playing ground. Good for the people, good for business. Not only would I expect this to make 'net access cheaper, but I'd expect a lot more ISPs to sprin

  • I need this connection right NOW.

    All the legitimate linux distros are just waiting for me to download them!

  • Good (Score:4, Insightful)

    by Khyber ( 864651 ) <> on Sunday June 20, 2010 @12:59PM (#32632988) Homepage Journal

    Maybe now the Australian people won't get fucked by Telstra any longer. Seriously, that's got to be one of THE worst ISPs I've seen people use.

    I've had more stable video conference calls on a 56k dialup.

    • by dwywit ( 1109409 )
      S'funny - I've heard the greatest range of responses to Bigpond/Telstra service. I deal with mostly domestic customers, plus a few small businesses, and the unhappy ones are REALLY unhappy - they'll never, ever go back to Bigpond. Most of the others, well, it just works. Telstra's business-grade offering for ADSL is OK - they're not the cheapest, or the fastest, but I've never spent more than 10 minutes on a phone queue, and issues get resolved fairly quickly. I've only stopped recommending Bigpond recently
      • Re: (Score:3, Insightful)

        by smash ( 1351 )

        This pretty much sums it up. THey're a bunch of money grabbing cunts, but if you pay (the exorbitant amount) for a high grade service, you actually get a high grade service.

        To some people (businesses) this is important.

        Home use though? Telstra? You're fucking crazy :D

        • by dwywit ( 1109409 )
          Not Telstra, bigpond. And your mileage varies, obviously. As I said, not the cheapest, or the fastest, but until recently (as I mentioned above), the tech support was better than most others I've had to deal with - the only other ISP that I've dealt with that's any good is Westnet. I'm usually called in because the end user can't decipher the accent on the other end of the phone. The amount of buck-passing and finger-pointing I've heard from some ISPs makes it not worth the hassle, or the difference in pric
      • I'll buy in as a former telstra customer - well I am 'forced" to give them line rental still but that is all. They fucked over my dad at age 78 and persuaded him that he needed a new mobile (cell) phone that he the discovered was costing him a fortune and he couldn't work out how to use anyway. I second the vote for Westnet. I have used them for a number of years and got my Dad onto them after the f-wits at Telstra did f-all to help him. Westnet may not be the cheapest - actually I don't know because I h
    • by smash ( 1351 )

      I've had more stable video conference calls on a 56k dialup.

      Then you're doing it wrong. Do telstra over-charge? Yes. Are they a pack of cunts? Yes. Is their tech support garbage until you get through 18 levels of helpdesk gumbies to someone with a clue? Yes. However their backbone is solid.

      Unless there is some fault which you haven't managed to get telstra to sort out, the problem is not likely Telstras.

      I've dealt with Telstra and other ISPs in australia for the past 15 years in both a second ti

      • by Khyber ( 864651 )

        "Then you're doing it wrong. Do telstra over-charge? Yes. Are they a pack of cunts? Yes. Is their tech support garbage until you get through 18 levels of helpdesk gumbies to someone with a clue? Yes. However their backbone is solid. "

        Not by any means am I doing *ANYTHING* wrong. My business partner in Australia gets disconnected REGULARLY during our video-conference calls because Telstra's backbone SUCKS BALLS, and he's paying for business-class service.

        We had to resort to using our cell phones to get busin

  • FUD. (Score:5, Interesting)

    by bbqsrc ( 1441981 ) on Sunday June 20, 2010 @01:01PM (#32633002) Homepage
    NBN is a private company funded by the government for now. Once it's up and running, the government will cut and run like with everything else. Trust me, this has very little to do with censorship.

    For anyone truly concerned, they never tested any of their ISP-level filtering shit on the fibre networks, because they know it'll fuck up under that load. If anything, the NBN will make any further censorship proposals go away... for now.
    • Re: (Score:3, Insightful)

      Splitting telstra into retail / wholesale is a good idea.... but we just sold the thing for about $20b, and now we're buying back the wholesale half at the same time we're going to replace the infrastructure anyway?

      And why on earth would the viability of the network be in question without telstra's customers? Surely a faster / better built fiber network would have a queue of customers beating down their door?

      • Surely a faster / better built fiber network would have a queue of customers beating down their door?

        Not without running the service at a loss. Telstra offers 'fast enough' service for most users over fully-written-down infrastructure and should totally spank a commercial greenfields national FTTP network on price. The government can't run the NBN non-commercially (at a loss), otherwise the expenditure has to come on-budget.

      • Splitting telstra into retail / wholesale is a good idea.... but we just sold the thing for about $20b, and now we're buying back the wholesale half at the same time we're going to replace the infrastructure anyway?

        It's true that the original Telstra sale was fucked (privatising a monopoly just turns it into a private monopoly). However this move makes economic sense - they're not so much buying Telstra's crappy old copper infrastructure, they're buying the pipes, cable conduits etc. that that infrastructu

  • This is Great (Score:5, Insightful)

    by sonicmerlin ( 1505111 ) on Sunday June 20, 2010 @02:08PM (#32633412)

    This will save the government billions of dollars in trench digging and pole construction. This is a great sign that the NBN won't be scrapped by any upcoming parties.

    On the other hand since the NBN is essentially going to either make Telstra's service a niche product or drive the company into bankruptcy, you'd think they'd just nationalize their assets anyways. But at least this way the shareholders, most of which are common Australian families, will get something out of it.

    • by SJ ( 13711 )

      The sad part about this, is it's just another case of the public getting screwed by the government. Guess what... Telstra used to be a national asset. We already HAD a "National Broadband Network" using the technology of the time. But then the government decided that wholly owned communications network wasn't something the Australia public needed, so they sold it off (and then lost the election). So now the public has to pay to get back what we already had...

      And politicians wonder why they are universally h

      • by ashridah ( 72567 )

        Wow, this has to be some of the best revisionism I've heard in a while.

        Questions to keep in mind when reading the parent:
        * Just how in debt was the Australian government when they sold off nationally owned utilities, debt which they inherited from the previous administration, who's in power currently?
        * Just how pathetically overbearing was Telstra, given that it owned both a consumer branch, and the infrastructure, and could essentially charge whatever they liked?
        * Who's benefited in the meantime thanks to

        • Just have a flat levy on residential land rates (like I think Queensland does for funding it's ambulance service).

          Remember economies of scale are king in this business. The costs of running a nation-wide network with 97+% of the residential market & 100% of the Govt market aren't really that much greater than the costs of running a a nation-wide network with 20% of the same market, well relately speaking. The only decision required is working out the simplest/cheapest revenue method for such a govt util

    • by tux0r ( 604835 )

      This is a great sign that the NBN won't be scrapped by any upcoming parties.

      Coalition to halt NBN-Telstra deal [] (if elected later this year).


    • by Ocker3 ( 1232550 )
      This does what IT companies across Australia have been pushing for since Telstra started being privatised, it separates the network installation and maintenance side of Telstra from the sales and service side, creating a flatter competition arena. When this actually comes into force, Telstra will compete with all the other Telcos to buy network access from the NBN organisation, without having either special access to the network, or having to pay to maintain the lines while being forced to allow access at (
    • the shareholders, most of which are common Australian families, will get something out of it

      That's the only reason I can see for the high value of this agreement. There's still the problem of getting fibre from the exchange to the street (or whatever local level...). We should have never sold the physical tunnels to telstra in the first place. I don't know why we're paying them for anything else. By the time the NBN is "finished" there shouldn't be too much left of their existing equipment.

      On a somewhat related note, I wonder how big a fish you'd have to be to get wholesale access...

    • This is a great sign that the NBN won't be scrapped by any upcoming parties.

      Unfortunately, this is not the case. What the Government and Telstra have signed is a "Heads of Agreement", which is not a binding contract; it's more like a broad set of terms both sides agree on.

      The finer details still need to be discussed and the resulting contract approved by Telstra's shareholders before we can really rest easily. Until then, either side (incl. the next Government, should it change) can pull out.

      It's defi

  • by isdnip ( 49656 ) on Sunday June 20, 2010 @04:04PM (#32634238)

    The Telstra-NBN deal illustrates how the telecom industry should be restructured.

    In the US, recent policy has moved in exactly the opposite direction, towards more vertical integration, so the telephone companies, who own wires built with monopoly money, don't have to let competing ISPs use them at all. They only have to let competitive phone companies (CLECs) use them under certain circumstances, which are shrinking; this basically is limited to old copper wire in urban areas and town centers.

    A "LoopCo" would be a company that owns the outside wire and leases it equally to all comers, building fiber for all who want to rent it, even cable. One fiber plant is a lot easier to afford than two or three. The original NBN plan would have built a new fiber plant to compete with Telstra; as customers moved off of Telstra's old copper network, Telstra would have lost money. Telstra blinked: They're selling their existing plant to NBN, so that they will be the biggest wholesale customer, not a competitor. Telstra wins: They get to use the new network, and get paid A$11B for their old wire. The country wins: They get NBN's new fiber, and don't have to fight Telstra all the way, or pay twice.

    The Bells in the US do not see it this way. Nor does the FCC, which is squarely in their pocket. Expect the US to fall farther and farther behind, as the farce called "National Broadband Plan" leads to more of the same, just with higher taxes to subsidize CenturyTel, TDS, and other rural subsidy whores who can use the subsidy money to put local wireless ISPs, who are not eligible for subsidies (only one subsidy recipient in a given place - it's literally a monopoly fund) out of business.

  • Sure... hop onto the nice, fast, cozy, government-provided internet.

    And in exchange, accept ubiquitous monitoring and censorship.

    Sorry, but the Australian government has gone far too Orwellian for me. If I had a choice of being on a government-sponsored internet, I would insist that it be just like phone lines: no censorship, and no monitoring without a warrant.
    • meh, the filter is stupid but it's just a dumb blacklist. I'm really not that worried that the government is somehow going to monitor 10 million internet connections for shits and giggles.
    • by Eskarel ( 565631 )

      I'm still not sure if the government is actually serious about the filter.

      They've been in for the better part of three years now and it's never even come close to coming up for a vote. They've certainly talked about it enough, but they've never even tried to pass it, despite the fact that they could probably actually get it across the line, especially if they actually played the "think of the children" card. They've tried to pass a whole bunch of other things which they didn't have a hope in hell of passing

    • by mjwx ( 966435 )

      Sure... hop onto the nice, fast, cozy, government-provided internet.

      But it's not. The government is building the dark fiber which will be sold at wholesale prices to private ISP's. We don't have a public Telco any more.

      And in exchange, accept ubiquitous monitoring and censorship.

      What monitoring and censorship. Most Labor MP's don't want it and have openly said so. The Coalition will oppose it just because it's a Labor idea.

      I would insist that it be just like phone lines:

      But it is. Exactly like phone

  • Like most major infrastructure projects in Australia, by the time this is completed (or even available in certain areas while others are still unconnected) it will be obsolete. There are providers offering much higher speeds in new residential estates already.
    • by Eskarel ( 565631 )

      No copper network in any real world scenario is delivering >100 megabit connectivity, those new housing estates have fibre to the premises(which is exactly what the government is trying to give to everyone else.

  • Seriously, wtf? Just ignore them and let them die a slow and painful death. Create a government funded company that *just* does infrastructure and only sells bandwidth to ISPs. The end user can only get a plan from one of these ISPs. Keep the infrastructure entirely separated from the end user and we can avoid a mess like selling Telstra again. Oh yeah, last step, don't get fucking greedy and sell this new company either.
  • I just read another article about this, NBN deal [] , which indicates:

    * Telstra gets to be removed from universal service obligation
    * and there will be yet another company setup to look after unprofitable telco services to rural and regional Australian - called USO Co - with only 50 million to do with with (at least to begin with)

    As to filtering - I still think it is a part of a master plan to create a backbone which is filtered before it ever reaches ISPs. They won't/aren't concerned with filtering
    • Telstra's universal service obligation is what makes them horribly expensive for the bulk of the population. They seem to have a policy of a nation wide pricing structure, so city customers essentially subsidise country customers. Maybe, just maybe, this will result in slightly lower prices from them and therefore more competition. Right now the only city Telstra customers are the mums, dads and grandparents who don't want to research telecommunications services (because, frankly, it's boring at bat shit) a
      • by AHuxley ( 892839 )
        Telstra is huge in marketing and sells speed.
        On rust belt adsl, 2+ its really just the laws of physics and quality limits, distance.
        The universal service obligation comes with many neat options too, like road removal ect.
        Recall how smaller Australian telcos had to beg and fight to lay small amounts of city optical?
    • by Eskarel ( 565631 )

      Which is how it always should have been. Privatizing the network meant that Telstra had to be saddled with all sorts of ridiculous legislation to stop it from becoming an abusive monopoly, and to ensure service to the bush. That's the primary reason why Telstra shares aren't worth spit, because Telstra can't be competitive, no matter how hard they try.

      Universal service should always have been a government thing because it's a massive money sink which is supposed to be there for the good of society.

  • "The NBN is a 100Mbps open access fiber network that will be rolled out to 94% of the Australian population"

    Currently, the plan is only 90% coverage with fibre, although the recent report by KPMS suggested they increase that to 92%. I believe the 94% is the current (claimed) Telstra ADSL coverage.

    • by thogard ( 43403 )

      Except that in housing areas full of California millionaires only gets about 80% to 85% coverage in the US. The figures for the NBN in Australia are just wrong.

  • They are acquiring access. That is, renting access to the "fit-for-use" pits and ducts from Telstra. I hope that this is only a mistake in the reporting, but perhaps there is a buy option at the end of the lease. []
  • How much did the Government sell Telstra for in the first place? ;-)

    • Wikipedia suggests that a third of Telstra was worth $14bn in 1997. The current market cap of Telstra is $41.8bn (which actually suggests that the company is worth less today than it was in 1997). Telstra's total assets run to approximately $37bn. The Government still owns about 10% of Telstra through its future fund.

      $11bn would be about 26% of the total value of all Telstra's stock or 29% of the value of its assets.
  • That infrastructure already belonged to the people of Australia, since we initially paid for it (when the Government initially built it).
    Then it was given away as part of Telstra when the company was partly privatised.
    Now we have to pay for it again so we can replace it.

  • Basically the reason Stephen Conroy is the Net Minister is because he knows how to get the telcos rolling with the NBN. I don't think they expected him to be a complete nutjob regarding the other stuff.
  • Come on along and be impressed, the alibi of broadband.
    Australia has to have the best, the alibi of broadband.
    It will connect to everyone, in every home or nearly.
    It's going to be a heap of fun, it's going to cost us dearly.

    When the brand new broadband comes to town, it won't be that much quicker.
    A special filter slows it down, to catch the porn.
    Must ask Kevin, one thing we don't understand.
    With the net so full of crap, who needs broadband?

  • If the pipe between Australia and the rest of the world is still shit, what exactly is improved by laying fiber all over the place? Quicker access to the web site of a local plumber?

Any sufficiently advanced technology is indistinguishable from a rigged demo.