The Australian government is moving ahead with a $31 billion national broadband network that will operate on a structurally separated, wholesale-only basis, with all licensed retail providers able to buy and use the network. The network aims to connect 90 percent of Australian homes with service at speeds up to 100 Mbps.
Every private company bid submitted in any earlier tender process earlier had been rejected by the Australian government as inadequate.
Instead, a public-private partnership will be commissioned to construct the network, with provatization planned for five years after network operations begin. But construction might take seven to eight years, so it will be some time before an privatization event occurs.
The network would operate on a wholesale-only, open access basis, separating retail operations and allowing Optus, Telstra and other companies to build services into the system.
Telstra, though, will not be barred from applying to manage the wholesale network, once built. In some ways, the scrapping of the original plan might be positive for Telstra, which now will face for the first time a high-speed optical fiber network that virtually any other retail competitor can use.
The upside is that although Telstra might not savor the new and more-competitive marketplace, it might be able to salvage a role as the wholesale operator, even as it has to compete as a retail provider buying access from the wholesale entity.
There are other, shorter-term sub-plots as well. One is the mix of motives, from economic stimulation and job creation, that are blending with the concrete goal of creating a broadband platform; as well as the issue of how well the plan will work out in terms of end user pricing, which affects the ability to raise investment capital to build the network in the first place.
Still, the move potentially ends the stalemate that has prevented Australia from moving ahead on badly-needed broadband upgrades that have been stalled by inability of regulators and policymakers to come up with a solution acceptable to Telstra, the national incumbent.
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