From
http://www.news.com.au/heraldsun/sto...73-664,00.html

TELSTRA builds Kevin Rudd's precious high-speed broadband network or nobody
does, writes Terry McCrann.

In 2008. In 2009. Indeed, pretty much as far into an internet warp-speed
future that it's possible to see. It's Telstra or its nobody.

In all the spin, the claims and counter-claims, the abuse, the assertions of
'readiness to build', the seeking of and/or gaining 'approval', this is the
one solid truth.

Telstra builds the network. Or it agrees to joint venture it with the
taxpayer. Or it allows someone else to build it.

I'd assign a very low probability to the latter two. But I can envisage
circumstances where Telstra would sign off on such an alternative.

But that's the absolutely fundamental point. It's in - it's entirely in -
Telstra's gift. And it will exercise that power, to its own best perceived
advantage.

And that advantage is very simply, that it builds the network; on its terms.
Or nobody does.

Not unless the Prime Minister wants to write out a cheque for -- pick a
figure: $30 billion? $40 billion? Whatever, somewhat more than the $4.7
billion assigned to help build it.

It all comes down to Telstra's existing copper wire network and the ducts it
runs in.

There is no way that Telstra is going to let anyone else - whether Optus or
Rudd - have access to those ducts. Far, far less let them rip out the
existing copper and replace it with (their) fibre.

At the first step in that direction, by anyone - whether Rudd, Optus or ACCC
chief Graeme Samuel -- Telstra would unleash a blizzard of litigation that
would freeze it faster and harder than a chilly wind off the Antarctic
plain.

To proceed into that blizzard would be at risk of the most humungous
compensation payment ever in Australian history. Trust me: nobody would be
proceeding.

But surely the competition legislation can force Telstra to let somebody
else access its ducts and its existing network? Hasn't that already
happened, many times? And hasn't Telstra -- physically and legally - let it?

True. But that was yesterday and a 'different' Telstra. A pre-Sol-and-Phil
Telstra.

None of that access threatened Telstra's existing infrastructure - despite
the usual grumblings from a technology-sensitive business.

And it certainly didn't threaten it fundamentally in a core business sense.
Although it was irritating -- to actually assist competitors eat into your
previously monopoly profits, using your own infrastructure.

The proposed FTTN - fibre-to-the-node - network is fundamentally different.

It would threaten Telstra's existing infrastructure.

Either physically replacing the copper - certainly, if Telstra built it.

Or supplanting it, running next to it in the Telstra ducts. Arguably
rendering the copper unusable.

And certainly causing issues at the nodes, where the fibre has to hook into
the last bit of copper going into the home.

Self-evidently, it would threaten Telstra in the most fundamental business
sense.

Because such a network is all about replacing the copper. Certainly for
internet broadband, but also for basic telephony.

And indeed also replacing the Foxtel and Optus cables as well for pay-TV and
other services.

A non-Telstra FTTN network would also threaten to strand its existing copper
wire broadband D-slams in exchanges, in exactly the same way a Telstra FTTN
network would strand everybody else's.

It is utterly inconceivable that Telstra would 'allow' this to be imposed on
it.

Apart from anything else, it has a rather big point. It would constitute
confiscation of its assets.

So its first defence would be litigation that could delay any opposition
build-out for years. It could even start its own build-out, accepting -
risking - the access terms that would be imposed on it.

In such a context, there is no way an Optus - or the so-called G9 group -
could start spending big dollars.

All the claims by Optus and G9 are just so much hot air. Including
submitting pricing terms to the ACCC.

Earlier this month Optus put out a press statement: "We're ready to build a
FTTN network."

Optus chief Paul O'Sullivan forgot to put in the fine print: Provided,
someone gives us the Telstra network to build off.

No wonder Optus says it can have cheap prices on its network. It's not
costing a full build-out of the Telstra ducts. Apart from the time it would
take to actually replicate their building.

But isn't the new Government going to hold a competitive auction?

Great idea, but if Optus/G9 win, how does Rudd and Senator Stephen Conroy
propose to give them access to Telstra's ducts?

This side of the 12th of never or $40 billion, whichever comes first?

In very simple terms. Telstra will decide who gets into its ducts and on
what terms. Or we let it, on its terms.

So what about structural separation? So we can have a common-user or
government-owned network company? And everyone from Telstra to Optus to the
minnows, pay to access it at arm's length?

Exactly the same issues. There is no way Telstra is going to agree to such a
huge loss of business advantage from its integrated model. And nor should
it.

So if the Government thinks it's necessary in the 'public interest'. Get out
the cheque book. To pay for the actual infrastructure and additional
compensation to Telstra.

Trust me. It's not going to happen. So it's Telstra or nothing. I'll go with
nothing. Unless Rudd wants to tear up the Trade Practices Act.