You know something is up when the main phone and internet companies in Australia (excluding Telstra) decide to get together and develop a plan how they can compete with each other going forward. Or more importantly, how they can compete with Telstra and Telstra’s wish to push Fibre to the ‘node’. Basically what Telstra want to do is to have Fibre going to cabinets serving every 200 or so homes, and in these cabinets put much of the technology of the telephone exchange.

The problem with what Telstra are proposing is that it makes it really really hard for competitors to get access to the copper lines… and makes it uneconomical. So what the carriers have suggested is forming New Company to own the new nodes, and the cables back to the exchange. And then once inside the exchange, competition is much easier. A lot of effort has been put into this proposal, and I hope that it is the one that goes forward.

What I found interesting was that it was going to cost about $175K for every 200 or so households for the external plant. This did not include costs inside the exchange which would be minimal… nor did it include Telstra’s cost in removing huge aounts of obsolete copper cables from the ground… Professionally I found the whole thing facinating.

Some of the numbers do not make sense though. They mention a 50% penetration which is fine, but they are talking about switching over 100% of customers in an area onto the node, since the node will do voice services as well. But the economic evaluation assumes that this is not happening, or that this service is being supplied at a zero cost, subsidized by the broadband users…. Interesting.