Telstra has launched an aggressive plan to effectively lock competitors out of its copper network.

It today detailed its intention to offer 12Mbit/s ADSL2+ to 4 million premises in mainland capital cities using Fibre to the Node (FTTN).

It will do this by installing fibre optic cable to street-side cabinets which then connect to customers' houses directly using less than 1.5KM of existing copper phone line.

Telstra also said it planned to replace 7,500 pair gain systems and remove other "technology blockers" such as loading coils and bridge taps.

But Telstra Chief Operations Officer Greg Winn said today that it would only build the network if competitors didn't get access. "We're not building the network for Optus, SingTel or any other competitor. We're building the network for Telstra's use with Telstra's customers", he said.

Any competitor that wanted to offer an ADSL or voice service using its own DSLAM hardware would have to build physical cabinets at each node.

But to enable the higher speeds, 20,000 nodes would need to be installed within 1.5km of customer premises. What is currently one exchange build and backhaul run would become almost 50 per exchange — clearly unattainable for most if not all competitors.

"What makes this difficult is the scale of it how much we're going to do and how fast we're going to do it", said Winn. "We are not doing anything that would deny any competitor access to that last portion of the copper."

But Telstra's competitors disagree. Michael Malone, MD of third largest ISP iiNet, called the plan a "sneaky but pointless attempt by Telstra to roll back competition in the last mile" and considered it "doomed to failure". "Telstra is facing real competition, for the first time ever, in its fixed line telephony business", he said. "It's a ridiculously transparent attempt to return to a monopoly position."

The sentiment was echoed by Simon Hackett, MD of Internode, which was the first ISP in Australia to provide ADSL2+ more than nine months ago. "Telstra are likely on the verge of yet another competition notice if they press on with the apparent intention to withhold supply of above-1.5M services to wholesale while offering them at retail", he said.

"Just as their competitors are finally gaining access to the exchange buildings, Telstra are investing billions of dollars in unplugging the copper lines at the exchange end and replugging them into street cabinets, where their competitors are realistically unable to follow them."

Malone believes that its unlikely to be accepted by the ACCC. "There is no chance at all of Telstra getting a regulatory exclusion on the last mile. It would roll the clock back ten years and be bad for all consumers", he said.

Instead, Hackett has called on the ACCC to make ADSL2+ a "declared service", meaning Telstra must offer it to competitors on ACCC terms. ACCC Commissioner Ed Willett seems to agree. He told The Australian yesterday that "refusal to supply might constitute an anti-competitive activity that would be subject to a competition notice, but perhaps the more targeted approach would be to look at declaration of an ADSL service."

But Winn says that if the ACCC forces Telstra to share the network then it "won't do it, plain and simple, it's no go on that piece of the network. And I don't know how to be any more clear than that." Telstra would then concentrate on its national 3G wireless network, he said.

Links:

• Telstra announces Next-Gen Network  (Whirlpool, 15 Nov 2005)
• ACCC eyes Telstra on ADSL  (The Australian, 15 Nov 2005)