Broadband prices are the lowest they have ever been in Australia. But for how long?

ATUG Managing Director Rosemary Sinclair Comments on Fibre to the Node

January 2008

ATUG Managing Director Rosemary Sinclair Comments on Fibre to the Node - extract from her January 2008 column, "ATUG Opinion"

Fibre to the Node

Discussions in early 2007 between the ACCC and Telstra (ahead of public consultation on a Proposed Undertaking by Telstra in regard to access to the FTTN for competitors) stalled over the cross subsidy for regional services to fund the Universal Service Obligation which in Telstra’s view is not adequately funded by industry. Telstra sought $13.63 per month to cover the cross subsidy. The ACCC was prepared to allow $1.77 per month in the access price for competitors. Funding the USO/regional services has been a key feature of all Telstra’s regulatory activity recently – including its position on ULL pricing. The quoted wholesale price of $85 per month is arrived at by calculating existing margin returns rather than assessing true costs. This tendency to monopoly rather than competitive pricing is the reason a new FTTN service would have to be subject to price regulation. The debate needs to be broadened to Fibre to the Premises and the regulatory framework adopted or adapted will need to ensure affordable services are delivered to end users. Industry focus is still on speeds rather than affordability.