NBN MUST RIGHT WRONGS OF TELSTRA'S REGIONAL BROADBAND RORT

Optus declared today that the National Broadband Network (NBN) provides a once in a generation opportunity to reform the regulatory regime which had left Telstra free to gouge the bush while at the same time holding regional Australia to ransom with its anti-competitive behaviour.

Speaking at the Communications Day Summit in Sydney today, outgoing managing director, Telstra Wholesale, Kate McKenzie admitted that Telstra uses high access prices in regional areas to limit competition. In response to a question on why Telstra charges wholesale rates of over $250 per line in some regional areas, Ms McKenzie stated that "we (Telstra) had to recover our money somewhere".

Responding to this comment Maha Krishnapillai, Optus Director, Government and Corporate Affairs said, "The inadequacies of the current fixed line regulatory regime have led to this sort of behaviour from Telstra who continue to dominate the fixed line market some 15 years after the de-regulation of the Australian telecommunications market.

"Nowhere has this been felt more than in rural and regional Australia where lack of competition and underinvestment in telecommunications services had led to a digital divide between the city and the bush. This is all the more difficult to stomach when Telstra continues to enjoy up to 88 cents in the dollar margins on its fixed line network¹, little of which has been reinvested to improve fixed line services for people living in rural and remote parts of Australia," he said.

Evidence of this can be found in the Regional Telecommunications Independent Review Committee (RTIRC) report Framework for the Future, which found that "People in regional Australia do not have access to broadband services on equitable terms to those applying in urban areas with regard to price, speed and download limits.^2"

"As if its behaviour to date wasn't bad enough, Telstra seems intent on keeping regional Australia in the digital dark ages for some time to come," Mr Krishnapillai said.

In 2007, Telstra mounted a media and legal campaign against the OPEL-led Broadband Connect program whose sole purpose was to provide competition for fixed high-speed broadband to underserved areas of rural and regional Australia.

In 2008, despite the Government clearly stating its objective of reaching 98 per cent of population with the NBN, Telstra submitted a 12 page letter committing to only building a NBN to "between 80 per cent to 90 cent" of the population.

"Unlike the Optus bid which proposed building the NBN in regional areas first, Telstra has stated that it would take up to eight years to roll-out NBN services in non-metropolitan areas.

"To add insult to injury, Telstra tried to shut down its CDMA network before regional Australia had suitable handsets or coverage on the replacement Next G network. It required a public outcry and Government mandated action to stop this rort.

"Telstra should apologise for cruelling broadband availability for the people of regional and rural Australia over the past few years. As Optus has consistently argued, the National Broadband Network must now be used to put in place a regulatory regime that promotes competition and puts an end to Telstra's regional rort once and for all," Mr Krishnapillai said.

¹ The Digital Compact and National Broadband Plan, Telstra Briefing paper, 7 September 2005
² Regional Telecommunications Independent Review Committee (RTIRC) report Framework for the Future "Finding 2.2.3" p160

Media contact:
Elizabeth Greene
Optus Corporate Affairs
Tel: (02) 8082 7850