Tuesday, March 4, 2008

Telstra seeks indemnity on network

The former government-owned monopoly advised the Australian stock exchange yesterday that it had received a request from Communications Minister Stephen Conroy to provide "various items of existing network information" that would be shared with potential bidders for the Government's $4.7 billion fibre-to-the-node (FTTN) contract.

"Telstra has responded to the minister's request by proposing to provide a set of existing network information subject to security safeguards and the full indemnification of Telstra by the commonwealth," Telstra acting company secretary Claire Elliott wrote.

Telstra, which has raised security and commercial concerns about releasing the information, which links in to many of Australia's security agencies, also said it would suspend some of its current infrastructure investment plans after the bid process.

"In view of the FTTN process now commencing, we will review current investment plans and it is ! likely that some investments will be put on hold until we know the outcome of the bid process," Ms Elliott wrote.

The move to suspend some investments - understood to include infrastructure that would probably be duplicated by the FTTN - signals Telstra's strong intention to compete against its rivals to win the national broadband contract.

Senator Conroy said through a spokesman: "We are aware of the concerns that have been raised and we remain in constructive discussions with the whole industry."

The Australian revealed on Friday that Senator Conroy had delivered an ultimatum to Telstra and its rivals demanding they voluntarily release details of physical network information or face a new legislative regime to force the disclosure and distribution of the data.

Telstra's rivals, including Singapore government-owned Optus, have the most to gain from the ultimatum and have argued over the past nine months that bidding for the na! tional broadband network would not be genuinely competitive un! less all players had access to Telstra's physical network information.

Opposition communications spokesman Bruce Billson questioned the impact of Senator Conroy's move on Telstra's investment plans.

"What's most disturbing is confirmation that the Government is using taxpayer money to displace private sector investment, as evidenced by Telstra's advice to the stock exchange that it will hold off on future investments until Labor's FTTN muddle is sorted out," Mr Billson said.

Telstra's share price closed down 2c to $4.64 yesterday.

By: Roshan De Alwis

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Source: http://www.australianit.news.com.au/story/0,24897,23322648-15306,00.html
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