TechnologyTelecommunications

NBN should consider buying fibre networks from Telstra, Labor says

The government-owned National Broadband Network should consider buying fibre networks from Telstra and other fibre operators across Australia covering up to 300,000 homes, Labor has said.

Last month, NBN Co announced it had managed to raise an extra $4.1bn in private debt facility, pushing the total debt to be taken on by the company to $55bn.

NBN Co has said this extra money could be used for “strategic” investments after the rollout is completed at the end of this month.

It comes as NBN has revealed it had already been in discussions with Telstra to potentially buy the company’s South Brisbane fibre network and new housing estate Velocity networks that cover about 45,000 homes.

Telstra received an exemption from having to offer an NBN-like service on the network in 2012, on the expectation that the network would be duplicated by NBN Co in 2013.

The Coalition changed NBN policy in 2013, and this area was declared adequately served, meaning NBN Co did not build a network in South Brisbane.

Residents within the network have complained the prices for broadband on the Telstra network are as much as $20 per month higher than an equivalent service on the NBN.

Several users on the broadband enthusiast website Whirlpool have also complained about low upload speeds on the services. The 100 megabits per second (Mbps) download plan only has 5Mbps upload speeds, compared with 40Mbps on the NBN.

The exemption granted to Telstra was due to expire this month. However, in a submission Telstra has asked for it to be extended while it was still deciding what to do with the networks.

“Telstra is committed to exiting the operation of residential and small business fixed access networks within NBN Co’s fixed line network.

“To that end, Telstra engaged with NBN Co and participated in good faith discussions regarding the sale of certain of the [fibre-to-the-premises networks] over a significant period of time.”

Telstra said it was “continuing to explore a number of options” around the networks. When asked to comment on whether a sale was being considered, both NBN Co and Telstra declined to comment.

Labor’s shadow communications spokeswoman, Michelle Rowland, told Guardian Australia NBN Co should look at options to bring the Telstra networks, and new housing networks owned by Opticomm, into the NBN.

“If NBN providers could deliver services over the Velocity network it would expand choice for households and reduce internet prices,” she said.

 “Bringing Opticomm into the fold could also give NBN Co access to sprawling fibre assets in outer suburban and regional centres, including the ability to grow its revenue streams by serving a greater share of new housing estates.”

Rowland said the company should see whether its systems can integrate into the existing systems used by Telstra or Opticomm, or consider buying out the networks, provided it is value for money and NBN does not already have infrastructure.  

“Ultimately, this is about improving choice for consumers and creating options for future service improvement in the regions and the suburbs.”

A 2019 analysis of Telstra’s fibre footprint by the Australian Communications Consumer Alliance Network (Accan) found over five years people had paid an extra $900 to $1,200 for internet, and many of those were likely vulnerable consumers, with 1,065 age pensioners, 621 disability support pensioners, and 746 low-income families on family tax benefit A.

Labor’s MP for Griffith, which covers South Brisbane, Terri Butler said the Telstra network had been “a deep and ongoing source of frustration for the community” and customers deserved a choice in broadband provider.

A spokeswoman for the communications minister, Paul Fletcher, said the assets would be valuable but it was up to Telstra, NBN Co and other interested parties to come to a commercial agreement.

While NBN Co is currently considering buying networks from Telstra, there is the possibility Telstra could then buy the whole NBN company from the government in the future.

Last month the minister appeared more open to the idea of Telstra’s wholesale company InfraCo eventually owning NBN Co than he had in the past, provided Telstra spun off InfraCo.

“I’ll leave it to Telstra’s bankers and lawyers to dream up structures. But the position is clear, if you operate retail telecommunication services, there’s a barrier that applies to your acquiring NBN. If you don’t, then that particular barrier does not apply,” he told the AFR.

“No doubt Telstra is very well placed to employ high-priced legal and investment banking talent should they be interested in pursuing the matter.”

Fletcher’s spokeswoman said the commercial negotiations had “very little to do” with the potential future “market structures” of the NBN.