FttN jettisoned to dodge Telstra compensation

The government scrapped its Fibre to the Node (FttN) broadband network in part to avoid litigation with Telstra, according to regulatory documents released today.

The public document extract details shortcoming with proposals including lack of funding without “substantial support from the Commonwealth”, lack of comprehensiveness and “value-for-money”, and lengthy roll out times.

A FttN would “likely require exclusive or near-exclusive access to Telstra’s... last mile”, according to the report, and any operator providing access over the loop “runs a risk of liability to pay compensation to Telstra”.

Bidders did not assess the potential compensation costs and liability to the government, and according to the National Broadband Network (NBN) expert panel, potential operators including Acacia, Axia Netmedia, Optus, the Tasmanian government and TransACT would not be able to pay out Telstra and maintain a “viable business case”.

The government received 120 submissions to the six week regulatory reform paper which began early this year.

Communications Minister Stephen Conroy said the government will push to introduce regulatory legislation this year. “The submissions support the government’s conviction that regulatory reform is urgently required to deliver better outcomes for consumers while the NBN is being rolled out, ” Conroy said. “The regulatory reforms we are now developing will improve competition and service during the transition to the NBN.” The paper considered competition and consumer-protection reform for the telecommunications sector.

The members on the expert panel included John Wylie, Lazard Carnegie Wylie CEO; Tony Mitchell, Allphones Chairman; Laureate Professor Rod Tucker, University of Melbourne; Professor Emeritus of Communications, Reg Coutts, University of Adelaide; Tony Shaw, former Australian Communications Authority Chairman and Dr Ken Henry, Treasury Secretary.

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