[LINK] Customers may be forced on to NBN to keep phones

[Max Devlin]

[Every day in every way, this just gets bette and better]


Customers may be forced on to NBN to keep phones

    * Annabel Hepworth and Lauren Wilson
    * From: The Australian
    * October 12, 2010 12:00AM


THE Gillard government and the key providers of the NBN are still
working out how to ensure basic phone services to those people who do
not sign up to it.

In Tasmania, official estimates forecast that just 16 to 25 per cent
of premises passed by the NBN rollout would subscribe.

This prompted the state government to switch to an "opt-out" model,
where homes and businesses would be automatically connected to the
service unless they refused.

Last night, the government revealed that those wanting to retain a
fixed-line telephone service in their home would be forced to connect
to the NBN.

A spokeswoman for Broadband Minister Stephen Conroy said people living
within the planned NBN fibre footprint - which is the 93 per cent of
premises that would be covered by the network - must have fibre
connected to their homes through the NBN if they want to maintain a
fixed-line telephone connection.


"Anyone who has a fixed-line phone service will continue to have a
fixed-line phone service," the spokeswoman said. But before a home
owner can choose a telecommunications provider for their fixed
telephone line they must opt in to the NBN network.

The situation facing people within the NBN footprint who refuse to
connect to the network remains unclear and is still subject to talks
between the NBN Co, the government and Telstra.

Currently, Telstra has a universal service obligation requiring it to
ensure basic telephone services are available to all Australians on an
equitable basis, no matter where they live.

Under Telstra's $11bn deal with the NBN Co, the telco would be
relieved of that obligation, which would be transferred to the NBN Co
for the areas covered by the fibre network.

That deal would see Telstra gradually shut down its ageing copper
network - currently the main way of providing fixed-line telephone
services - and "migrate" (transfer) customers to the new broadband
network.

A spokeswoman for the NBN Co said yesterday there had been "detailed
discussions" over several months about a "range of complex issues".

"Those discussions are continuing and include issues such as
migration," she said.

While Senator Conroy's office last night pointed to the implementation
study into the NBN as proof the NBN Co could develop a "strong and
viable business case", concerns have lingered that the project might
need shoring up.

While Tasmania has chosen an opt-out model, NSW and Victoria have
ruled out a similar move.

But this issue has sparked intense debate.

Last night, iiNet managing director Michael Malone said other states
would need to follow Tasmania's lead in order to shore up the
viability of the NBN project.

With an opt-in model, Mr Malone warned, "complacency means people don't opt in".

"It's going to be very difficult to get the take-up rates that are
needed, and also very expensive because technicians will need to keep
coming back to do the houses that missed out the first time around,"
Mr Malone said.

Paul Broad, the head of the nation's third-biggest telco, AAPT,
sounded a note of caution about forcing people into the project. He
asked: "If people were forced on to it, what are they going to be
charged?"

He pointed to Sydney's Cross City Tunnel, where the NSW government
initially adopted measures aimed at pushing motorists away from
alternative routes and into the tunnel.

"In Sydney, when they tried to force everybody into the Cross City
Tunnel, everyone went up in arms," Mr Broad said. "NBN has that sort
of a feel to me."

The government is expected to introduce competition and consumer
reform legislation into parliament in the next three weeks that is
crucial for the agreement between Telstra and NBN Co to proceed.

There have been concerns about the lack of transparency on the
non-binding deal between Telstra and NBN Co.

Future Fund chairman David Murray has raised concerns about how little
the fund - Telstra's No 1 shareholder - knows about the deal and its
financial consequences.

Business Council of Australia president Graham Bradley has raised
concerns about the competition ramifications of the deal with Telstra
on the NBN, while other business leaders have demanded a business case
be developed for the project.

Senator Conroy's spokeswoman said the government was expected to
respond shortly to the implementation study.