The provision of a high speed Broadband service across Australia will not go to tender. Instead - the Federal government will lead a consortium of private investors and hold a 51% stake in this $ 43 billion undertaking.
For over a decade Broadband plans have not progressed because of Telstra. The original idea was to implement fibre optic cable to the node - meaning that this form would terminate at telephone exchanges and be carried from there to homes and businesses by the existing copper cable network - owned by Telstra.
Telstra played hardball. It refused access to this copper cable system - unless the government agreed to it's own terms, which would have placed a Telstra strangehold on access and pricing - and excluded meaningful competition.
The government bit the bullet and has now decided to take fibre optic cable all the way to homes and businesses - bypassing Telstra's copper cable and making it obsolete. As a result, the way will be clear for telephone companies to provide a direct and better phone service in this country via Broadband.
The loser is Telstra. It's prime asset just turned into a liability and it looks like being trampled into the ground by a stampede of competitors. Clearly - a plan of brinksmanship to emerge in control of Broadband has backfired - and the company lost the pot of gold in the middle of the jackpot table !
But - this is politics !
A lot of things can happen in the months ahead. Telstra will soon have a new CEO and it's shareholders must be angry at the disaster that has overtaken their investment. There is a very good chance that it will grovel and come whining back to the government - pleading to agree to any term the government chooses to offer and at any price that will allow it's copper cable to be used.
The government may change tack and thus reduce costs by returning to a " to the node " strategy.
At least the stranglehold is broken - and it is vital that Australia get high speed Broadband so that we can not only compete - but move far ahead of the rest of the world.
It is not without commercial danger. At the moment optic cable is a clear winner, but we should remember that several decades ago that copper cable was the only way to run a phone service - and now it is obsolete.
Mobile phones and wireless access are making giant strides - and thinking people need to keep their eye on the ball and project their thoughts into the future.
An interesting scenario to ponder ! What innovation is taking shape in a mind somewhere that will provide the successor to the Internet ?
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