Newly Nice Telstra Flips Fast Broadband Switch

Sydney Morning Herald

Thursday February 7, 2008

Matt O'Sullivan and Jonathan Pearlman

TELSTRA has offered a rare show of diplomacy toward the Federal Government for the second time since the election, before crucial talks about an $8 billion national high-speed broadband network.

After a stand-off with the Howard government for more than a year, Telstra yesterday decided to turn on its ADSL2+ broadband network despite gaining no new concessions from Labor. The move will provide broadband speeds of up to 20 megabits per second - 78 times faster than standard ADSL - for up to 2.4 million homes and businesses across the country.

In a marked change from the fraught relations with the Howard government, Telstra's chief executive, Sol Trujillo, praised the Rudd Government yesterday and declared that he "stood ready" to deliver Labor's proposed nationwide broadband network.

"A lot has changed in the last few months," Mr Trujillo said. "This simple act of the new Government unlocks the potential of high-speed broadband for households and businesses around Australia. It has been able to be done because of the Rudd Government's sensible pro-investment approach."

The Prime Minister, Kevin Rudd, and his Communications Minister, Stephen Conroy, joined Mr Trujillo for the announcement at Telstra's Canberra headquarters, in an obvious attempt to usher in a new era between the Government and Telstra.

But the diplomatic posturing comes as a showdown looms over the Government's national broadband plan, which is yet to go through a tender process that Telstra expects to win.

Telstra's decision to enable ADSL2+ at more than 900 telephone exchanges - after refusing to do so for the last 14 months - follows its decision to respond diplomatically last month when Senator Conroy delayed for three months the closure of the regional CDMA mobile phone network.

Consumers who subscribe to BigPond's high-speed packages - which cost from $60 to $150 a month - will receive the faster speeds at no extra cost. The technical limitations of ADSL2+ mean the speeds slow down for households further from exchanges. Mr Trujillo yesterday credited a letter from Senator Conroy as the catalyst for turning on ADSL2+ in areas where it does not face competition.

But the minister's letter - which restated the competition regulator's long-standing position that there was no need to mandate further competition - did not mark any change in government policy.

The Opposition communications spokesman, Bruce Billson, said the announcement belonged in the "broadband bulldust bin" and Telstra had used the letter from Senator Conroy as an excuse for its needless delay.

"Claims of some specific new action or decision by the Rudd Government that 'unlocks' the higher-speed network is simply self-serving nonsense," he said.

The former minister, Helen Coonan, told the Herald: "This is hysterical. Conroy has knocked off a letter which I had already written."

Industry insiders said Telstra was attempting to ingratiate itself with the minister to prevent him using the tender process for a fibre-to-the-node network to split the company in two.

Telstra has pledged to switch on ADSL2+ at 370 exchanges within the next week, including Avalon Beach, Campbelltown south, Coffs Harbour, Woy Woy, Mittagong and Banora Point.

© 2008 Sydney Morning Herald

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