Sunday, September 5, 2010

National Broadband Network

The National Broadband Network (NBN) is a $43 billion Fibre To The Home (FTTH) network, initiated by the Labor Government, that will deliver download speeds of 1 gigabits per second to 93% of consumers, with the remainder covered by wireless and satellite technologies. It was rolled out in Tasmania in July 2009, with the first services delivered on 1 July 2010. The Coalition had vowed to scrap this project if it assumes government. The future of the NBN is now in doubt, depending on who will form the next government.

Tony Windsor, one of the three independents, whose support is being sought by both the Labor and Coalition, had backed the NBN, criticising the Coalition's cheaper alternative as a retrograde policy that would create a digital backwater in rural Australia. He was briefed by the Department of Broadband and was convinced that "you do it once, you do it right, you do it with fibre".

Telstra was privatised by the Federal Government in 1997, 1999 and 2006, with the aim of increasing competition in the telecommunications industry. However, this did not result in the desired improvements in services and reduction in costs for consumers. As the owner of the majority of the nation's copper network, Telstra exploits its monopoly position as a dominant wholesaler, selling its fixed line and ADSL services to competitors at unfair rates. This explains why broadband plans are much more expensive in Australia than in other countries.

An objective of the NBN is to break the monopoly of Telstra by structurally separating it into distinct retail and wholesale companies. Telstra has essentially agreed to the deal, transferring its copper infrastructure and fixed-line customer base to NBN, receiving $9 billion in return, keeping its 50-percent stake in cable operator Foxtel and allowing to bid on the new wireless spectrum.

When I moved to Altona in 2007, I found out that ADSL2 services were still not rolled out here. I signed up with AAPT, after doing some research on the Whirlpool Forum. Last year, I made the mistake of switching to Telstra on a 2-years ADSL1 contract after being swayed by a telemarketer. This is $10 more expensive per month than the AAPT plan but at a higher speed. At that time, Telstra was the only provider of ADSL2 services to Altona but I was not prepared to pay for its much higher price tag. Now there are many cmpetitors offering ADSL2 services at much lower costs in Altona. I feel that I had been deceived into signing a more expensive binding contract. I will immediately switch to another ISP provider once the contract expires next June. I will also be very wary of Telstra in the future.

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