In a bold move, the Australian government said Monday it will pay Aussie telco Telstra $11 billion to shut down its copper legacy network to accelerate the move of consumers to a new, government-funded, high-speed fiber infrastructure. In a tricky bit of negotiating, Telstra will continue to operate wireless and satellite TV businesses, while also being freed from universal phone service obligations.
As the U.S. government and the FCC, in particular, begin to test out their own “third way” approach to broadband regulation, the Telstra deal certainly adds a major twist.
Stopthecap.com has good coverage of the details of the Telstra deal:
In addition to an $11 billion offer, Telstra is expected to keep the estimated $580 million the company could earn from recycling more than 70 million kilometers of copper phone wiring no longer needed. Another $1 billion will be earned from real estate sales. At least 3,000 telephone exchange offices are expected to be declared redundant after switching to the fiber network, bringing Telstra plenty of additional earnings as those properties are sold off.
The agreement gives NBN Company, the government-owned entity building the fiber network, access to Telstra’s outdoor facilities to house the fiber network, saving the government billions in construction costs. Telstra has also agreed to purchase wholesale access to the new network and will also decommission its coaxial cable-based systems, moving customers to the new fiber facilities as built.
Connected Planet’s take,
Dan O’Shea:
Somehow, I think some U.S. telcos might be ready to sell the U.S. government all of their copper plant under similar financial terms. They could spend more money, time and energy on their wireless networks and reinvent broadband in a network environment where usage caps and early termination fees are business as usual instead of heavily criticized non-starters. Also, they could finally walk away from the expensive maintenance of legacy copper, and as an additional benefit, copper theft would become the government’s problem.
Like Telstra, they could lease access from the federal government. The only problem: Is any government prepared to run and manage a highly reliable network?
In any case, I don’t think the U.S. government wants to run networks &mdash ;it just wants to tell everyone else how to run them.
That’s our take on this. Let us know what you think in the comments section below:
Let us not forget that in this country, legacy copper in any area that has any meaningful population probably is in competition against a reasonably effective HFC plant. The proposed subsidies to bring high speed to the boondocks would probably be the source of any significant funding. But, only after the telcos buy the satellite providers. It\’s not nice to use subsidies to wipe out the competition.
This government hasn’t caught up to the 21 Century yet, especially in the telecommunication area! How can you expect it to run or even govern the telecommunication industry!
Right now the market for a fiber networks is in the big cities where there is a heavy population not in the small towns or rural areas! This where big companies like Verizon and AT&T will spend their money! At least they will get the money back faster!
Of course, the government can use tax payers money to bail companies like AIG!