Telco CEO Asks For "Baby Bell Solution" For Australia

natecochrane writes "The CEO of Australia's No.2 telco, Optus, has called for a "Baby Bell" solution to handle what he says is a growing threat to competition in the emerging $43 billion Australian national fibre-broadband network. Paul O'Sullivan says that only by breaking up the network architect NBN Co and tendering out its services, overseen by an independent board (much like Australia's Reserve Bank the Fed), can competition be preserved. And he had a few choice words to say about Australia's 'No.2' ISP, iiNet: 'If you take into account we operate a cable network and not ADSL [primarily] we're still significantly larger than iiNet.'"

Comments

Oh pretty please Mr Government

[mjwx]

Do something about my competition, I dont want to compete, it's too hard.

The problem Optus has here is that it loses a valuable position as part of a copper monopoly. Optus and Telstra own pretty much all the copper in Oz (telephone and cable) and charge other ISP's, such as iinet a fortune to use it. Not to mention the DSLAM's they rent out to other ISP's. Once the NBN is completed Optus and Telstra have to compete on equal terms with competitive ISP's like iinet and Internode. NBNco leases the NBN fibre to any company that will pay the fee to lease the line, this includes Optus.

'If you take into account we operate a cable network

That can reach about 5% of Aussie homes, let me know when you were planning to cable up Vic Park, I'll be getting NBN by the end of the year. Given the reach of Optus's cable network, iinet is still number 2.

Bunch of self serving, conniving wankers. You've let the broadband situation get this bad in the first place, 15 years of doing next to nothing, you wouldn't even roll out ADSL2 until iinet gave you a swift kick in the arse. Well we're all sick of it and now the Government is doing what you refused to and you're having a big bloody cry over it.

Harden the fuck up Paul O'Sullivan.

Re:Oh pretty please Mr Government

[norpy]

Optus don't own any POTS copper, telstra own 100% of that.

They own a HFC cable network that was overbuilt by telstra's own HFC cable in almost every place they rolled it out - so most of australia has no cable, and those that do have 2 networks to choose from.

Re:Oh pretty please Mr Government

[mjwx]

Optus don't own any POTS copper, telstra own 100% of that.

POTS which was laid by Telecom Australia, not Telstra.

For those of us that have just tuned in, Telstra is the privatised remnants of our public telecom, Telecom Australia which laid the copper around Oz. Telstra have been neglecting that infrastructure for the last 15 odd years.

They own a HFC cable network that was overbuilt by telstra's own HFC cable in almost every place they rolled it out

Which they are under no obligation to permit other ISP's access to, hence part of the copper monopoly. They also tried some backroom deals with Foxtel combining Optus Cable and Foxtel Pay TV services to try and better Telstra, Foxtel uptake simply suffered as a result.

HFC is also no real competitor to Fibre, it's a shared bus with a maximum speed of 100 Mb\s deployed in selected area's of 2 Australian cities (out of 18 locations with a population exceeding 100,000) where as the glass NBNco is installing will not top out at 1 Gb\s although 100 Mb\s is the best NBNco will be offering at the outset, will be available to 93% of Australian homes (fixed wireless and satellite will comprise the rest) and each link is a dedicated connection to the backbone.

Re:Oh pretty please Mr Government

[wadeal]

Telstra have been neglecting that infrastructure for the last 15 odd years.

How so? If I have the slightest problem with my phone line I call Telstra, and within days they have a tech onsite repairing or replacing whatever length of cable required, and if it's outside my property at no cost to me. How are they neglecting it in anyway?

HFC is also no real competitor to Fibre, it's a shared bus with a maximum speed of 100 Mb\s deployed in selected area's of 2 Australian cities

Shared 100Mb/s bus? Where did you pull that figure from? That would mean that myself on my 100Mbit plan could fuck over the 32 other people on my section, but that doesn't happen at all. And I'm not the only user on this section of cable with 100Mbit. And you're wrong about the cities. Optus and Telstra Cable are available Melbourne, Sydney, Brisbane, and only Telstra in Adelaide and Perth.

and each link is a dedicated connection to the backbone.

No. You WILL be sharing with either 32 or 64 users back to a node that runs to the backbone. Can you imagine the cost or even the size of the cable to run each individual house back in spread out suburbs like here in Melbourne? Try researching a single thing you say next time.

Re:Oh pretty please Mr Government

[mjwx]

How so? If I have the slightest problem with my phone line I call Telstra, and within days they have a tech onsite repairing or replacing whatever length of cable required, and if it's outside my property at no cost to me. How are they neglecting it in

Except when you're with iinet, it takes 2 and a half months (11 weeks) to get a fault even looked at.

Telstra double-billed my former workplace (a business customer) in 5 out of every six bills. The day after I announced we'd completed our transition away from Telstra (to Amcom), I arrived at my desk to find a carton of Little Creatures Pils and a very nice thank you note from the accountant and bookkeeper.

Shared 100Mb/s bus? Where did you pull that figure from?

http://en.wikipedia.org/wiki/Hybrid_fibre-coaxial

http://en.wikipedia.org/wiki/Cable_Internet_access

http://en.wikipedia.org/wiki/Internet_in_Australia#Residential_Internet_Access

100 Mbit is the fastest offered by Telstra which was only made available in Melbourne only in 2009. Most of Telstra's and Optus's cable is only 30 Mb\s

Optus and Telstra Cable are available Melbourne, Sydney, Brisbane, and only Telstra in Adelaide and Perth.

Citation.

Also which suburbs. I've lived al over Perth and not had a single cable connection. It's all been DSL because the only copper in the ground is POTS. You'll quickly find that they rolled cable out to very, very limited area's and only to tick a box that says it's in every capital city.

No. You WILL be sharing with either 32 or 64 users back to a node that runs to the backbone

Uhh...

What have you been smoking.

You'll be connected by point to point fibre back to the exchange, basically identical to POTS. There you'll be multiplexed onto the backbone (via a GPON rather then a DSLAM). In fact, they'll be using the exact same pits and ducts for the glass as is currently being used for the copper. It will be no different then the current topology.

Can you imagine the cost or even the size of the cable to run each individual house back in spread out suburbs like here in Melbourne

It will look exactly the same as the current POTS system which is also point to point from the exchange (backbone) to the node (your house). This is the kind of FUD that I'm getting tired of disproving. Please do some research before spouting off again, you can start with the links I've provided.

Re:Oh pretty please Mr Government

[Sabriel]

How so? If I have the slightest problem with my phone line I call Telstra, and within days they have a tech onsite repairing or replacing whatever length of cable required, and if it's outside my property at no cost to me. How are they neglecting it in anyway?

Must be nice to live in a capital city. The pit near my neighbour's house was left in disrepair for several years - they started joking that they'd have to hold birthday parties for it.

Telstra deliberately neglected the infrastructure as much as they could. And why not? That's standard operating procedure for any corporation lacking a strong moral or visionary centre, because without that the tendency is to a destructive feedback loop for short-term profit. The only counters are usually fresh executive blood or some form of external threat - and Telstra has acquired both, the latter especially in spades. Interesting times.

Re:Oh pretty please Mr Government

[Ronin441]

It's amazing, for a company only created in the 1990's, how quickly Optus turned into a clumsy inefficient monopolist. (Well, duopolist, really.) You'd think they'd have designed new systems from the ground up, but you can sure feel their back end creaking like it's written in COBOL. Telstra were (and are) so big and slow and expensive that you'd think a new player would run rings around them. But they didn't.

Bring on the day when the phone network is obsolete, and all phone companies can do is sell data connections.

Re:Oh pretty please Mr Government

[lazybeam]

Telstra cable is available at my house - but not Optus. AFAICT the Telstra cable covers more houses than Optus, since I know quite a few people with Telstra cable, especially on the Gold Coast. (I use ADSL2+)

Re:Oh pretty please Mr Government

[diodegod]

That can reach about 5% of Aussie homes, let me know when you were planning to cable up Vic Park, I'll be getting NBN by the end of the year. Given the reach of Optus's cable network, iinet is still number 2.

WA represent!

Oh HFC. You could be living in a recently developed suburb (e.g. Dalyellup, maybe Ellenbrook) where it used to be just e-wire cable service, man those guys had it rough in the early days until they got ADSL.

NBNco's WA second stage roll-out maps are low resolution but it looks like the Vic Park installation will cover my suburb too. I will be dropping ADSL2 so hard it's going to leave a crater.

Imagine a future where I can switch ISPs without waiting a month for the churn because I'm already on naked DSL.

Re:Oh pretty please Mr Government

[AK Marc]

Bunch of self serving, conniving wankers.

That's redundant. They are a corporation.

Once the NBN is completed Optus and Telstra have to compete on equal terms with competitive ISP's like iinet and Internode. NBNco leases the NBN fibre to any company that will pay the fee to lease the line, this includes Optus.

At least your NBN is better than what's going on in New Zealand. They are just handing large cash subsidies to the top two companies to roll out what they would have rolled out anyway, rather than actually focusing on serving people. More cost, less return, but lots of profit for the big 2 (presuming all the complaints don't get it changed).

Re:Oh pretty please Mr Government

[AK Marc]

How so?

They are the monopoly. The copper in the ground has a time associated with it, usually 20 years in the US, but sometimes 30 years. This is the usable life, and it's scheduled to come out of the ground essentially on the day it goes in. However, like in the US, the monopoly just says "meh, no one knows or cares that we are using mostly 50 year old copper in almost all places where copper was laid that long ago" and continues to use it. In the US, they essentially made the promise to replace the copper with fibre after 20 years, then didn't. That lack of action is the neglect.

If I have the slightest problem with my phone line I call Telstra, and within days they have a tech onsite repairing or replacing whatever length of cable required, and if it's outside my property at no cost to me. How are they neglecting it in anyway?

If they had replaced it on schedule, then you'd likely not be having the problems you are calling them for, and you'd likely have fibre to your door already. Just because it's working and they respond quickly to faults doesn't mean they aren't neglecting the basic infrastructure. You know, the massive network of copper in the ground that they probably paid $0.10 for every $1 spent to put it there when they bought the company on the promise to keep it up at market rates, which they then simply didn't do.

No. You WILL be sharing with either 32 or 64 users back to a node that runs to the backbone.

All Internet is "shared" at some point. With DSL, you have a dedicated line to the DSLAM. With ADSL2+, they are moving to outdoor DSLAMs in neighborhood cabinets for shortest copper length. If they have the DSLAM at the CO, then yes, it will be dedicated copper lines back to the CO backbone. And if not, they have, in practice, more bandwidth between the cabinet and the CO than the sum of the lines from the homes to the cabinet. Why? Because if they have copper to the CO, then they'd often have worse bandwidth to the CO than a single person's DSL line. So it's almost always fiber. Since it's almost always fiber, they've laid a line capable of many multiples of the total copper bandwidth. They might cheap-out on the optics, but the line is greater than the sum of the inputs. Also, the links back are as "private" as anything on the Internet.

With cable, you do get more than the 100 Mbps the GP was talking about, but you are on a bus with others. That means that with a DOCSIS modem of your own you can flash and such, you can set up to listen to all your neighbor's traffic. It's generally not done in practice, but it still is done some and is possible on almost all cable networks. And that's impossible with DSL.

Re:Oh pretty please Mr Government

[AK Marc]

Optus is a rigid and grossly inefficient company, from what I've seen. But I've dealt more with their satellite section. They focus so much on doing things they way they've always done it that they don't even pay attention when that doesn't work anymore.

That makes sense when making orbital adjustments to a satellite, where one small error and a billion dollars disappears. But for consumer Internet networks, it's silly and overbearing.

Re:Oh pretty please Mr Government

[thogard]

You need to look at how xPON works.
There will be a splice point on a pole on your block and that will contain a 32 way splitter prism and each of those lines then go to a house. You are not getting a fiber all the way back to the exchange with the NBN and most of the exchanges will be gone according to the master plan. The upstream may go to another splitter down the road or it may go into an optical switch. Until it gets to a packet switch, all your data is shared with everyone else. The recent PON standards have changed the split id's from 10 bits to more since many carriers saw the need for more than a 1:1024 split ratios. We have been told we are only going to see 1:32 here... at least for now many other telcos are starting to put in 1:64 and 1:128 splitters.

PON isn't much different from HFC except for the last mile which uses coax and many HFC systems can be converted to true PON by pulling out amps and replacing the coax. Both systems tend to use a version DOCSIS to talk to the end user equipment. The NBN is using a 2.5 gbit shared (compared to Telstra which use 600 on their HFC and 2500 on some system) and some US cable TV providers which use 1.2 gbit over coax.

At the last election, the oppositions plan was to change the rules that would allow your ISP greater access to the exchange and backhaul but it was poorly explained.

Re:Oh pretty please Mr Government

[daver00]

How so? If I have the slightest problem with my phone line I call Telstra, and within days they have a tech onsite repairing or replacing whatever length of cable required

All they have to do when they rush out to help you is make a "temporary repair", this is little more than twisting some new copper together and wrapping it up in electrical tape. The repair is then flagged "temporary" and goes into a list of temporary repairs which all need to be fixed within a certain time. Except that they almost always screw up again before they are fixed properly and the whole cycle repeats itself.

Add to that most Telstra pits (the things with cement or plastic lids which give cable access) have broken lids, or broken drainage. If a pit lid is broken it is meant to be flagged and replaced, except that they never are, and consequently half the pits in the nation fill up with water and hence phone lines go bad whenever it rains: enter the temporary repair jobs mentioned previously. Add to this the fact that much of the copper installed is original cabling and never had proper insulation to begin with, this is mostly the case on the fringes of the network though.

I'm no fan of a new government monopoly, but we desperately NEED an infrastructure upgrade like the NBN. Telstra (and its competitors) have had the opportunity to prove to us that the private sector can handle such a vast network spread over such a thin populace, and they have shown that they will do as little as possible. The NBN also means structural separation of Telstra, which is something that should have been implemented from the outset.

Re:Oh pretty please Mr Government

[Melibeus]

POTS which was laid by Telecom Australia, not Telstra.

Actually most of the copper was probably laid by "The Post Master General" it's that old and decrepit.

Re:Oh pretty please Mr Government

[Kalriath]

And Telecom New Zealand did much the same with large sections of in use telecomms infrastructure. Your point?

Re:Oh pretty please Mr Government

[sonicmerlin]

Uh....no. Cable DOCSIS 3 currently maxes out at 160 mbps to one node, which is shared with far more people than a xPON node is. Cable is horribly constrained compared to fiber. GPON shares 2.5 gbit/s among 32 or less; XGPON, an upcoming standard being field tested by Verizon and other telcos, does 10 gbit/s.

The Fed?

[ZDRuX]

....overseen by an independent board (much like Australia's Reserve Bank the Fed

Yes, and we all know how well Federal Reserve banks manage things.

Re:The Fed?

[PenguSven]

Just because the US Federal Reserve is run by Chimps in suits, doesn't mean ours is.

Re:The Fed?

[Cimexus]

The Australian Reserve Bank is pretty good actually. Keep in mind Australia was the only OECD country not to go into recession during the global financial crisis. A big part of that admittedly was the fact that we didn't lend money to people that couldn't possibly repay it, and the Govt. was running a modest surplus rather than the massive deficit present in many other countries. However, the Reserve Bank also has a part to play in managing the economy and has, on balance, done a pretty good job of it over the last decade or two.

Funny economy politics

[Errol backfiring]

Well, it is kinda odd. Politicians want companies to compete to win, but they do not want any company to win.

Re:Funny economy politics

[drinkypoo]

Well, it is kinda odd. Politicians want companies to compete to win, but they do not want any company to win.

Uh, that's crap. They do not want any company which does not do everything they want it to do to win. I dunno what it's like down there but here in the USA we have free exchange between government and the boards of corporations which are "coincidentally" permitted to get away with anything and everything.

Baby Bell didnt work.....

[metalmaster]

All of Ma Bell's offspring collude to bring us the same shitty network at ever rising prices

Re:Baby Bell didnt work.....

[commodore6502]

The breakup of the ATT Monopoly did allow other companies to connect their devices to the lines. That led to a boom in different phones to buy, and modems went from 1200 bits/second (stagnant for 40 years) to 56000 as companies competed to outdo the others.

Re:Baby Bell didnt work.....

[Biff Stu]

And to add insult to injury, Bell Labs no longer exists.

Re:Baby Bell didnt work.....

[sjames]

It did work for a while. It's too bad the horror is slowly re-assembling like the T-1000.

but did we learn how to make it work?

[johncandale]

It's true the landline phone service has been consolidated again. Of course it's a little weaker due to cell phones, VoiP on cable lines and such. Not being a Aussie I have little commant on how this would work, but just because it didn't last here, doesn't mean they couldn't find a way to prevent a repeat there. Plus I think you forget how bad Ma bell was. Try thinking of the DMV from hell that has no offices, you have to call.

Also, the break up did what was intended, stopped it from monopolizing the computer industry (it tried) and other emerging techs. You could argue without the break-up Sprint could have never got into the long distance service, and Verizon started in 1983 as Bell Atlantic. It is possible, if left to stand, Ma Bell would have wrapped up most of the cell phone market before said competitors giving at least some market competition today. Just a thought. And it would seen completely natural to us today, as they own the phone lies, so why shouldn't they own the cell phones that connect to them?

in the UK at least...

[Anonymous Coward]

a baby bell is a small round cheddar in red wax coating... hilarity ensues.

Re:in the UK at least...

[sjames]

Same here in the U.S. Oddly enough, our landlines work OK, but cellular service is cheesy.

Re:It's spelled Fiber

[thogard]

Solder is a Latin word and has a silent L just like salmon. I have a nice book published in London in 1686 that seems to have left out all the U in color and it also avoids the French spelling that seems to define current British spelling.

Also Fiber optic cables are much, much cheaper than Fibre optic cables.

Re:The Fed? Try China did a pretty good job.

[MeateaW]

Surely our banking regulations (OH NOOOES BIG GOVERNMENT etc...) had a part to play in it. You know, lending money you actually *have* rather than lending money you don't have then selling that risk off to third parties to then repackage and sell to other banks as guaranteed income, to back additional lending to other parties.

Re:Broadband Nationalization

[MeateaW]

As an Australian to a Canadian, I hope to god yours gets started soon so it can add to the debate here in Australia! For the whole debate over our NBN there has been running a fox-news like smear campaign against our NBN since its inception. (The Australian newspaper attacks it atleast 1 article per day, anywhere up to 4 articles per day, with basically lies, or deliberate misinterpretations).
Hopefully your network hasn't got the same kind of hysterical response. Or if it does it survives long enough to help convince a few of the less gullible Australians of its benefits.
The next election here (~2.5 years away) is going to be so critical it almost hurts. (NBN hasn't fully ramped up, can basically be cancelled or massively scaled back if the Libs get in).