[LINK] NBN a done-deal Thursday?

[stephen at melbpc.org.au]

Telstra fixed for $11b deal to hang up on monopoly 

by Lucy Battersby, Clancy Yeates  June 22, 2011.
<http://www.theage.com.au/technology/technology-news>


THE government is on the cusp of signing two multibillion-dollar deals 
designed to lock in the national broadband network and restructure 
telecommunications as we know it.

The Prime Minister, Julia Gillard, is expected to unveil a historic $11 
billion infrastructure-sharing agreement with Telstra as soon as 
tomorrow, after the cabinet met late into Monday night to discuss the 
deal.

The board of the government-owned NBN Co, which is building the network, 
met and approved the deal last Friday. Telstra's board met at the weekend 
to discuss the deal which has been in negotiations since December 2009.

Advertisement: Story continues below Ms Gillard is expected to announce 
that the cabinet approves the deal, subject to a review by the corporate 
advisory group Lazard. A rejection would disrupt the rollout timetable 
and bring the whole broadband project into question. 

Under the agreement, Telstra expects to receive $11 billion from 
taxpayers in return for gradually shutting down its copper wire network 
and sharing its underground ducts with NBN Co. 

Without the Telstra agreement - which still requires approval from 
Telstra shareholders - construction would take longer and NBN Co would 
have to compete against Telstra for customers already using its copper 
and cable networks. The deal saves about $1.7 billion in construction 
costs and improves NBN Co's business model because customers will quickly 
migrate to NBN Co, a report published last year found. 

Households and businesses will have to use NBN Co's fibre or rely on 
wireless services. Optus is also believed to be in the final stages of 
negotiating a deal worth up to $1 billion to shut down parts of its cable 
network and transfer customers to NBN Co. 

Telstra expects to receive about $4.5 billion for transferring customers 
and about $4.5 billion for a long-term infrastructure leasing contract. 
But these values are in today's money and the dollar figures are expected 
to increase over time. 

The government is keen to finalise the deals to bed down the broadband 
network and shift the public discussion away from the corruption scandal 
at the former employer of the NBN Co's chief executive, Mike Quigley.

For the opposition, however, the Telstra deal undermines its policy of 
halting the network and allowing the Productivity Commission to advise on 
a cheaper way to provide faster broadband.

A former telecommunications adviser and consultant, Kevin Morgan, said 
the impending deals would make unwinding the network a challenge for any 
future government. Several pieces of legislation would be extremely 
difficult to reverse, he said.

Tomorrow the Communications Minister, Stephen Conroy, is expected to 
present the competition watchdog with a final copy of his instructions on 
how it should deal with Telstra's structural separation plans. 

By shutting down its copper and cable networks Telstra will effectively 
end its monopoly over the fixed communications network in Australia.


Read more: http://www.theage.com.au/technology/technology-news/telstra-
fixed-for-11b-deal-to-hang-up-on-monopoly-20110621-
1gdif.html#ixzz1PyzpRQsT

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