At the beginning of the week, it was announced that NBN Co and Telstra had reached a financial heads of agreement (on 20th June 2010). It marked a significant move ahead with the plans for National Broadband Network (NBN) and seemed like a newsworthy start to the week. However, NBN’s news was soon overshadowed by unexpected developments on the political front, and by Thursday we had a new Australian prime minister, Julia Gillard. Certainly a memorable week in which to start a blog! And, what would be the impact of this change on the NBN? It appears that Prime Minister Gillard also supports the NBN.
The heads of agreement reached between Telstra and NBN Co is the beginning only of a lengthy and complex process (although the heads of agreement has itself taken many months) to achieve what is in effect the structural separation of Telstra. It relates back to the Government’s proposals announced in April last year which sought to deal with the problem of Telstra’s market dominance. The Government gave Telstra two choices: voluntarily structurally separate or have functional separation imposed. The latter option would also have meant that Telstra would have been excluded from acquiring spectrum for advanced mobile/wireless broadband services.
The financial heads of agreement reached with Telstra means that, subject to ACCC regulatory approval, Telstra will gradually decommission its copper and hybrid fibre coaxial cable network, whilst NBN Co will have access to parts of Telstra’s infrastructure which can assist with the NBN rollout. Thus, instead of Telstra having the potential of being a competitor or NBN Co having to duplicate parts of the network, Telstra will become a customer of the NBN. If the agreement is completed, Telstra’s access to wireless spectrum should be secure. One of the Government’s original requirements, that Telstra should sell its interests in Foxtel, does not appear to be being pursued; an indication that the Government is satisfied with the structural separation arrangements.
All of this indicates a satisfying step forward for the implementation of the NBN, and it might have received more news coverage had it not been for the mid-week developments. But for those of us who are interested in the impact NBN and the content services, likely to be offered over a superfast broadband, will have on traditional approaches to media regulation, little has yet emerged from the Government about its thinking and the form a review of such regulation will take. The Government had indicated that it would begin to address such issues in 2011. Perhaps now that progress has been made with Telstra, the Government may begin to turn its attention to this crucial aspect.
The heads of agreement reached between Telstra and NBN Co is the beginning only of a lengthy and complex process (although the heads of agreement has itself taken many months) to achieve what is in effect the structural separation of Telstra. It relates back to the Government’s proposals announced in April last year which sought to deal with the problem of Telstra’s market dominance. The Government gave Telstra two choices: voluntarily structurally separate or have functional separation imposed. The latter option would also have meant that Telstra would have been excluded from acquiring spectrum for advanced mobile/wireless broadband services.
The financial heads of agreement reached with Telstra means that, subject to ACCC regulatory approval, Telstra will gradually decommission its copper and hybrid fibre coaxial cable network, whilst NBN Co will have access to parts of Telstra’s infrastructure which can assist with the NBN rollout. Thus, instead of Telstra having the potential of being a competitor or NBN Co having to duplicate parts of the network, Telstra will become a customer of the NBN. If the agreement is completed, Telstra’s access to wireless spectrum should be secure. One of the Government’s original requirements, that Telstra should sell its interests in Foxtel, does not appear to be being pursued; an indication that the Government is satisfied with the structural separation arrangements.
All of this indicates a satisfying step forward for the implementation of the NBN, and it might have received more news coverage had it not been for the mid-week developments. But for those of us who are interested in the impact NBN and the content services, likely to be offered over a superfast broadband, will have on traditional approaches to media regulation, little has yet emerged from the Government about its thinking and the form a review of such regulation will take. The Government had indicated that it would begin to address such issues in 2011. Perhaps now that progress has been made with Telstra, the Government may begin to turn its attention to this crucial aspect.
