National Broadband Network: the bids are in, Telstra FAIL

Today has been very interesting indeed, news has flowed in about bidders submissions for the govenments National Broadband Network. In particular their $4.7 Billion grant to assist the successful candidate to build out the network.

On 11 April 2008, announced the request for NBN proposals. The deadline for submissions was 12pm today. We’ve had confirmation that a number of submissions were received including the 2 majors – Telstra and Terria (A consortium of Optus, Internode, iiNet and others).

The new network is expected to (source):

• deliver speeds of at least 12 megabits per second;
• use fibre-to-the-node or fibre-to-the premises architecture;
• be available to 98 per cent of Australian homes and businesses;
• have uniform wholesale pricing that offers consumers real value for money; and
• provide open access to wholesale broadband services on transparent, equivalent and genuinely pro-competitive terms and conditions.

Telstra FAIL
Interestingly Telstra’s submission did NOT meet the guidelines set out by the government. In fact they showed a complete lack of understanding for what consumers need out of the NBN. Their proposal to win the $4.7 billion of government funding contains only 13 pages (PDF 2.75Mb). If that sounds it’s a little light on, that’s because it doesn’t contain information regarding the construction of a NBN as requested, but a plan to cater to the profitable city areas, leaving those non-metro customers essentially out of luck. Even worse is their plan to take a short term approach and develop their existing copper infrastructure.

This is an extremely short-minded view, as broadband speeds have a limited capacity for future speed increases. If we are to have a hope of reaching the speeds of other nations – 100Mbps (i.e. Sweden and Japan), then Fibre optic is the only serious option. Although we may not need those speeds today, if the NBN project takes 5 years to complete, then our requirements will certainly be different. Think how far we’ve come in the last 5 years, dial-up speeds were the norm.

Telstra says by implementing VDSL they can reach speeds of 25 to 50Mb, the next question is at what cost ? Well they’re proposal specifies entry-level plans starting at $39.95 ($29.95 if u bundle your home phone) for a 1Mb/256Kb connection. Ridiculously the download limit is a completely unusable 200Mb. This is a clear sign Telstra do not understand the requirements of consumers online today. Operating System updates alone could see users being charged for excess downloads – ridiculous.

Details of the other proposals are limited right now, but early indications are that any option would be better than Telstra’s half-bid.

There’s currently no date announced for the government to make their decision on a successful applicant, let’s hope it’s before the end of the year.

Author: Jason Cartwright

Founder of techAU