Telstra attacks NBN bill

Robert Clark
03 Mar 2010
Daily News

Telstra has attacked the Australian government’s new draft NBN Co. bill, underlining the deep divide between the carrier and the government over its high-speed broadband strategy.

In their first response to the bill, Telstra chairman Catherine Livingstone and CEO David Thodey say they’re “concerned” the government would allow state-backed NBN to offer retail services.

In a letter to shareholders, they said this would “run counter to the core purpose of the NBN” and the government’s objective of restructuring the industry into separate retail and wholesale sectors.

“We are very concerned about this potential change in the Government’s position.”

The draft bill, released a week ago, gives the communications minister the discretion to allow NBN Co. to enter the retail market.

The bill is widely seen as an attempt by communications minister Stephen Conroy to get leverage over Telstra in the long-running negotiations with Telstra over the terms of its participation in the controversial next-gen broadband project.

The Australian newspaper reported today that the chances of the two parties agreeing on a price for Telstra’s assets soon appeared remote.

“[E]xpectations about price from both sides are not converging at all. In blunt terms, NBN Co is not willing to pay Telstra anywhere near what it believes its assets are worth,” the paper reported.

It said that Thodey had no forewarning of last week’s draft bill, which had been “clearly designed to threaten Telstra's commercial interests.”

Livingstone and Thodey said in their letter that Telstra supported the government’s NBN vision, but believe the legislation “is likely to destroy shareholder value and [make] an agreement with NBN Co. and the government harder to achieve.”

Separately, NBN Co. yesterday announced small-scale FTTP rollouts in five mostly rural locations around Australia. CEO Mike Quigley said the trials would provide a test of designs, construction methods and technologies.

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