Other ISPs making the push for Telstra to wholesale ADSL2

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Other ISPs making the push for Telstra to wholesale ADSL2

Post by Jazza » Wed Feb 27, 2008 6:58 pm

With other major ISPs pushing for Telstra to provide ADSL2 as a wholesale, what does Exetel think of this? And is there any business plans to follow suit?

More information can be found here:

Letter to ACC:
http://www.internode.on.net/pdf/news-me ... l2plus.pdf

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Post by ForumAdmin » Mon Mar 03, 2008 8:38 am

Non- Telstra DSLAMs?...The Monkey's Paw Story Springs To Mind

I remember back in mid 2005 when the first ISPs began to talk about their plans for ADSL2 DSLAM rollouts that I shook my head and made the prediction that "it would all end in tears". That wasn't, at least I don't think it was, my envy of larger and wealthier ISPs who could muster the capital/loan facilities to make it a reality but at the misguided views of the longevity of ADSL (generally) as the prime medium of delivering data and the insuperable difficulties that Telstra would put in the way of all but the very wealthy and legally adept ISPs - Optus was the only one that I thought would be able to sustain the twin pressures of greater investments than planned and much longer and more difficulties with activation than even the most pessimistic of conservative estimates.

I used a phrase at the time, which quickly drew amazingly vituperative comments about Exetel generally (basicaly from people whose ability to read a sentence of more than three words was highly suspect) that the "minnows" (those ISPs who were contemplating putting in place a small DSLAM network at that time) would be very foolish and would most likely bankrupt their companies because of both the lack of longevity of ADSL to make a sensible return on the investment and because Telstra would make very sure that the difficulties they would encounter would be so onerous the program would be financially unsustainable.

So. I took some grim satisfaction in reading the catalogue of woes set out over nine pages in the Herbert Geer Rundle letter I referenced yesterday. It set out, 30 months later, everythig that I said would happen - but you actually didn't have to be that bright or even that knowledgeable to know that.

Anyway - who gives a toss - it was always a high risk "strategy" and the people who went in to it had to have known that and some, probably very few, will make some sort of success of it though none will make any 'real' money - it will send most broke.

(David Teoh being the exception who has made a huge success of his investment but only because he found someone to pay for his DSLAM costs before the brown stuff hits the revolving thing).

So, back to the "be careful what you wish for" comments of yesterday - the nine bunnies lose big time whichever way the 'demand' for Telstra to 'wholesale' its ADSL2 DSLAM access goes.

1) The ACCC finds that there is no case to 'declare' ADSL2 - the bunnies have to pay a legal bill which only they know what the estimate is but whatever it is will likely be at least 2 - 3 times the estimate.

So major financial loss and embarrassment and all future planning on hold for up to two years. A total no win result.

2) The ACCC, and subsequent appeals, decide to declare ADSL2 and force Telstra to give access to all wholesale customers.

This is a total disaster result even worse than 1).

Why? - Apart from the he amount of money that they have drained away from themselves by entering this litigation.

a) It has ensured that, living in hope, the nine bunnies have put on hold any further geographic growth of their own DSLAM networks for up to two years and probably also ceased to upgrade the capacities of the exchanges they already have DSLAMs in.

b) For up to two years they have allowed Big Pond free rein to make their unbelievably attractive offers to their ADSL1 customers on those exchanges and if the time ever comes that Telstra’s ADSL2 services become available to them it will be too late as the majority will have been signed up on long contracts with BigPond.

c) When Telstra’s ADSL2 has been ‘declared’ it will mean that all other ISPs that haven’t built out DSLAMs will be added to the number of competitors in all their current exchanges.

d) Telstra’s 3G and the other three mobile carrier’s data over 3/4G offerings will have grown immensely in both speeds and data allowances and will make it impossible to make a business case for wire based data services in late 2009 when this process is, optimistically likely to finish.

e) Telstra, having signed up a very large proportion of the available customers at pricing of their choosing for two years, will allow themselves to be ‘forced’ to provide ‘true’ wholesale pricing of ADSL2 which will also allow BigPond to continue to ‘meet and beat’ all other DLSAM deployer’s prices and content offerings rendering their access to the Telstra ADSL2 network valueless.

The only lesson that at least some of the ISPs who are part of the ‘group of nine’ clearly stated as being learned some 3 years or so ago was that they HAD to roll out their own DSLAM network because it simply wasn’t financially viable to have to use Telstra’s – yet here they are, after all their grand plans have gone terribly wrong, insisting that they must be allowed to continue to be ripped off by Telstra.

So, by sometime towards the end of 2009 the nine bunnies, if they ‘succeed’ in their action wil have insisted that they go back to a situation that five years previously they were insisting was financially non-viable.

Just a touch of the monkey’s paw I would have thought.

(From JL's BLOG)

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