[Chapter-delegates] Structural separation in Australia

[Paul Brooks]

I'll jump in here as well as Holly, since its Friday....

On 3/06/2011 12:45 PM, Joly MacFie wrote:
>
>
> So, am I correct that Telstra will still own the pure real-estate and structure
> assets, and still be in the mobile business?

yes...

> Rent ducts etc at regulated rates to NBNco who will own its own fiber and sell
> access to RSPs

yes...

> - including backhaiul so that hey don't even have to have kit at the hed-ends?

unknown. Telstra will become an RSP in its own right, so will likely have its own kit
at the head-ends (which NBN Co are calling PoIs, Points-of-Interconnect, which NBN Co
will mostly be housing inside existing Telstra exchange buildings). Telstra will
obviously be providing its own backhaul to itself, but Telstra has not announced
anything about providing a backhaul service at the wholesale level for other RSPs to
use. Neither has anyone else, however anecdotally I expect there will be at least a
couple of organisations that will step up to this role in due course.

NBNCo itself is prevented from providing backhaul, so that a competitive backhaul
market amongst multiple longhaul networks develops.

> And the separation we are talking here is thus between the Telstra real-estate and
> the NBNCo service? Or what

the intended model seems to be similar to the New Zealand model - three entities,
Telstra Retail, Telstra Wholesale and Telstra Networks. Telstra Networks sells at arms
length to Retail and Wholesale. Still working through the documents released yesterday
to understand the intentions properly.

Telstra Retail and Wholesale will also buy NBN services from NBNCo, a separate fourth
entity in the mixing-pot.

>
> And these RSPs also be content providers a la cable companies? Triple play? and
> other "managed services".

An RSP can provide any service - including content services, PayTV (the NBN is being
built with IP-multicast functionality to assist with TV), telephony (The NBN terminal
has twin SIP IP-telephone clients built in for RSPs to use), and more conventional
data applications including Internet.


>
> BTW what about incumbent non-telstra cable tv providers - are they being
> disintermediated by all this, forced to become RSPs, or aren't there any to begin with?

Pretty much nonexistent in practice. Only Telstra/Foxtel is being forced to become an
RSP (and be compensated for it).
The largest cable TV provider is Foxtel, 50% owned by Telstra, and Telstra owns the
HFC cable network assets outright.
The Optus cable network distributes Foxtel programming for its PayTV service - and
Internet and PSTN under its own brand.
Telstra/Foxtel are being permitted to retain cable TV services on the cable network,
but are being required to agree to move the broadband services off the cable on to the
NBN fibre.

Other cable networks like Optus and smaller players aren't being required to move
anything to the NBN, but would probably quite like to be paid to do so like Telstra
is, since over time the customers/services are likely to move over through natural
attrition in any case!

>
> As far as the level 2/level 3 thing goes one has to feel, whatever one's partiality
> to Open Internet/IP it does give the wider potential for innovation. When I talked
> of level 1 above I was thinking that maybe - like Allied Fiber here in the US - they
> were going to rent out actual strands with no service at all. As long as there is
> sufficient choice in providers surely Open Internet will always be in demand and
> available - but you can't force it on people. Some people liked walled gardens.

Layer 1 dark fibre was deemed to be a non-starter, as it is impossible to do
competitive open access with a shared PON infrastructure, and too expensive in
transceivers to do anything direct. With the vast expanses that have to be covered,
and the need for every possible service provider to install amplifiers, transceivers
etc it would be a futile exercise in pointless infrastructure multiplication with a
customer base too small to achieve scale economies.
 >
> As far as the US goes we see the phone companies -  having achieved back door
> deregulation as the cable companies got in to the "information service" business -
> spinning off their last mile copper, which is rotting in the ground, to binge on
> spectrum and towers. They are now happily contemplating "segregating" the wireless
> market with caps and tiered pricing so as to manage demand, not to mention charging
> content and service providers - hence the pact between Google & Verizon. The
> wireline business is in the process of being ceded to the cable companies, who are
> doing there best to get leverage with content plays.  Could be argued that if we
> hadn't forced divestiture down their throats 30 years ago, the telcos might have
> done a better job of building out the promised fiber, rather than spending their
> effort on recombining and the bait and switch to DSL. With one company we'd be in a
> better position to push for structural separation here. As it is it's a total
> non-starter.  The only hope is, that we'll be in a leapfrog position after everyone
> else gets ahead :)

Sounds like another example of "Be careful what you wish for - it might just come true" !

P.


-- 
Paul Brooks
Treasurer
Internet Society of Australia
www.isoc-au.org.au