Telstra’s up to its old tricks

January 12, 2009

Stilgherrian writes in today’s Crikey (miraculously available for free online here) about Telstra playing silly buggers with high speed internet, in particular the sit back and wait for the opposition to deploy before launching services that are already there trick.

Stilgherrian mentions Telstra vs iiNet over ADSL 2, but the tactic goes back further. I mentioned it in passing in September, but here’s a better explanation.

Back in my days in Government, we had a lot to do with rural broadband, or more precisely the lack there of. Even into mid sized towns or suburbs of sometimes as many as 10-20,000, there was no ADSL. Telstra would constantly suggest that it wasn’t economically viable to provide the service.

The Howard Government launched Broadband Connect, one of their better policies that saw providers subsidised per user for each ADSL connection they place. I don’t remember the figures off the top of my head, but depending on the locality it may have been $2k-$4k per user, possibly less for outer suburban areas; for memory it also changed at least once over the life of the program. Under the scheme I had for a time a free cable internet connection for 3 months, with free cable modem…and no lock in contract. The scheme not only bought ADSL to bigger towns, it saw small communities for the first time getting access. I remember one location with around 200-300 people getting ADSL, and a couple of places under 1,000. As long as you got enough people to sign up, the Government subsidy covered your startup costs, and you might walk away with a profit.

It was a great program, and even in the South West of Western Australia there were maybe 3 or 4 different companies playing for a cut.

But this is what Telstra would do.

They’d get wind that XYZ ADSL was coming to a particular town, then out of the blue they’d announce they’d made ADSL available themselves, usually 2-3 weeks before the smaller company had their service available. They’d back it up with an intensive mail campaign that told people that ADSL was now available in their town. It may have included a phone campaign, although I don’t specifically recall.

The thing with Broadband Connect is that it was open slather; you weren’t awarded a Government contract to provide an area, instead who ever got in and signed people up got their cut.

So you’d have these usually small companies, investing decent money providing ADSL for the first time to communities that Telstra claimed weren’t economically viable to service, finding themselves beat weeks from launch by a mass campaign from Telstra.

Whether the capacity was in or not before as Stilgherrian suggests in the case of ADSL 2 and Cable I don’t know, but the speed to which Tesltra would magically make available these services would suggest just that; that Telstra has the tech in place, and that it would only provide it when a competitor was going to open.

That they’re still doing this in 2009 is a disgrace. It is unbelievably anti-competitive, and for Telstra to sue over the National Broadband Network if it can already be providing, at least to capital cities the SAME service in beyond all belief.

Structural separation, as I’ve always argued is the only solution. Telstra retail and wholesale must be split for the common good. If we have the capacity to provide 100mbps connections in capital cities now, it SHOULD BE PROVIDED NOW, not in a year or two when Telstra decides to use it to undermine the competition.

Besides, we’ll need these speeds to counter some of Conroy’s Great Firewall of Australia 🙂

14 responses to Telstra’s up to its old tricks

  1. Duncan, if you could suggest some times and assembly points perhaps we can all meet with pitch forks and torches? If Telstra want to keep us in the dark ages then maybe that's the only waythey'll get the message.

  2. Incredible, but somehow not surprising. I wish some academic would do an economic analysis of providing cheap/fast internet to all Australians.

    And how about looking into Internet over power lines.

  3. I actually think Telstra is a good thing for Australia and that we should start letting them make MORE profits as it benefits us all. Remember Telstra is owned by Australian shareholders and the rest of it goes to the Australian Future fund. Not keen on the singporians taken profits out of Australia.

  4. I actually think that building a conduit system between node points and premises that any company can use would a) provide a nice short term job boost, b) avoid the legally wrangling that will bog down a structural separation and c) would neuter Telstra far more effectively.

    Their strength is predicated on controlling the node to the premise. Exchange to node doesn't give them a huge amount of leverage. Take away the strangle hold on the connection between the node and premise you remove Telstra's monopoly advantage.

    The largest cost of deploying wired networks is digging up the ground and creating the piping. If the government focused on spending taxpayers money on that rather than also laying the fibre private companies lay the cable themselves creating competition between various fibre providers.

  5. I totally agree. I worked at what used to be one of the smaller ISPs during 2000-2001 and this sort of thing happened all the time. Structural separation has always been the only correct solution.

  6. There has been so much research into broadband over power lines – every year some new pilot program goes on and then it just disappears again – I've seen at least five or six major implementations quietly fade away over the last few years – think Tasmania, Scotland and a few others. Rumour has it that it causes mucho interference with various radio systems already in place.

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  8. Hi! I'm Jake Bunce, the manager of Viettel ISP at, and I think your post is awesome.
    It's hard to find quality information like this, I'm glad i found this, thanks for the valuable information.
    But I have a suggestion: In my opinion the posts font and size is not the best typo for read. It is very uncomfortable.
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