NBN changed to avoid losing against Telstra

  • Telstra bailed on FTTN talks
  • NBN est. cost of $36bn
  • New network to be FTTH

Tonight’s episode of Four Corners discloses how the government’s initial plan for a fibre-to-the-node network was binned to avoid paying compensation fees of about $20 billion to Telstra.

The NBN-themed episode to be aired tonight explores how Labor arrived at the extravagant National Broadband Network (NBN) model we see today which boasts a lavish $36 billion price tag.

The program also reveals how Telstra had originally planned to build its own network to rival that of the government’s.

"You've got to remember, this was in the period of Sol Trujillo and Phil Burgess. They had waged a war against the Howard government and its telecommunications policies," Communications Minister Stephen Conroy said.

Labor had initially planned to connect fibre optic cables to Telstra’s existing copper network. Communications Minister Stephen Conroy said that if this had gone ahead, the government would have had to “cut the copper,” and would have resulted in the government needing to pay compensation to Telstra for appropriating their property rights.

"The Government could spend $15 billion to build a fibre-to-the-node network, pay $15-20 billion to Telstra for compensation, and then Telstra could take that money and build a fibre-to-the-home network past you and strand 70 per cent of $15 billion on the side of the road," Senator Conroy said.

Phil Burgess, Telstra’s former PR chief, confirmed on the program that building a rival network was exactly what Telstra would have done.

"Absolutely, that's the way competition works," he said.

The Four Corners team will also travel to the towns where the NBN is already active to get feedback from residents. While tonight’s episode is guaranteed to be laced with NBN-jargon, the program will also give a guide to the NBN, with an explanation of how the technology works and what the possibilities of the network are.

Meanwhile, the NBN continues to be rolled out across Australia, and NBN Co has revealed the 12 providers that intend to offer fibre optic broadband for the initial mainland release.