blog If you’ve been following the statements of Communications Minister Malcolm Turnbull and NBN Co executive chairman Ziggy Switkowski, you would think Telstra wouldn’t have a problem with selling both its copper and HFC networks to NBN Co so the Coalition’s much-hyped ‘Multi-Technology Mix’ rollout approach can go ahead. “I think the outcome of these negotiations should lead to a situation where the copper network, the ownership, is transferred into the NBN; the ownership of the HFC network is transferred into NBN,” Switkowski said in early April. However, as it turns out, Telstra has other ideas. The Australian newspaper reported last week (we recommend you click here for the full article):

“Telstra boss David Thodey has revealed the telco giant wants to retain control of either its copper or cable network as part of its reworked $11 billion deal with NBN Co …”

Wow. This kind of throws a massive spanner in the works for the Coalition’s MTM mix option for NBN Co’s rollout. If Telstra winds up continuing to own either of its major fixed-line networks, this could cause significant headaches for NBN Co down the track if it gets into significant contract disputes with the big T, as well as during NBN Co’s eventual privatisation, because NBN Co will always remain heavily dependent upon Telstra for access to its basic infrastructure.

Globally, the model which the Coalition is proposing with its MTM mix approach is very unique commercially. Nowhere else has the Government attempted to buy back the incumbent telco’s copper network after privatising in the first place. And nowhere else globally has the government also sought to buy not one, but two HFC cable networks owned by other telcos.

What we’re seeing here with Telstra during the negotiation process over access to the telco’s networks is Telstra leveraging its position of strength over the Government to get the best possible result from the negotiations. Under Labor, the Government had Telstra up against a wall, because it fundamentally did not need Telstra’s assistance to build its NBN fibre infrastructure. It had the advantage. Under the Coalition, Telstra has the advantage — because the MTM mix approach cannot be delivered without Telstra’s active assistance. And Telstra is leveraging that situation to the absolute hilt.

Great.

Image credit: Telstra