Telstra scraps massive broadband plan

14 Aug 2006

Australia's largest telecommunications company has scrapped plans for an A$4 billion (US$3.06 billion) national high-speed broadband network after reaching an impasse with regulators over how to charge rivals for access.

Telstra decided to end discussions with Australian regulators over a next generation fiber-to-the-node (FTTN) wireline network slated to cover Australia's five major cities initially, then expand to the rest of the nation.

The company had aimed to ensure it was not subsidizing network access by rivals, but discussions broke down because regulators failed to understand the actual costs involved in building the network out to rural areas of the nation, Telstra said in a statement.

'We are not going to engage in a new investment costing A$4 billion that is just going to hopefully bring more revenues in on the IP side, but hasten the depletion of revenues that would otherwise be used to fund services to the bush,' said Phil Burgess, head of public policy and communications at Telstra.

Telstra won't invest in an FTTN broadband network until its costs are recognized and regulatory practices change, the company said.

In a statement, the Australian Competition and Consumer Commission said it was 'perplexed' by Telstra's decision.

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