In the coming months, the Federal Government will decide who builds the National Broadband Network (NBN)—a hugely ambitious project that is, by some estimates, the equivalent of building two Snowy River Schemes and four Sydney Opera Houses.
The NBN will be built on more than 100,000 kilometres of fibre optic cable rolled out to 70-80,000 "nodes"—the new network will bypass Telstra's landline exchanges—with the final leg to individual households to be filled in with copper wire or other appropriate technologies.
The two main candidates for this ambitious undertaking, Telstra and rival consortium TERRiA, provide government with a stark choice.
In one corner, Telstra, the gorilla of Australian telecommunications, is already the defacto provider of nearly all telecommunications in the bush, and with Next G has a proven track record on network rollouts.
In the other is TERRiA, a seven-member consortium led by Optus, that wants to break Telstra's feudal grip on telecommunications by building a network that will provide a Telstra-independent platform for competition among service providers.
Right now, however, there is only one in the race.
Last week Telstra did what TERRiA chairman Michael Egan called a "dummy spit" over the Glasson report's recommendation that an operational split of Telstra be considered in order to provide better services to the bush.
Telstra responded unequivocally by saying that if separation wasn't ruled out as an option, it would not tender for the NBN project.
Tenders have to be lodged with the Federal Government by November 26.
"All of our cash flows, all of the proposition we put in place for a national broadband network, are all based on the company being a vertically integrated play," said Geoff Booth, managing director of Telstra Country Wide.
"If you're going into a process where you're going to spend billions of dollars based upon a certain business model, and yet someone is reserving the right to impose a different model after the tender has been closed, all of a sudden the equation is totally different.
"We cannot submit a tender, we will not submit a tender … people think we're playing a bluff here, but I spoke to the chairman yesterday, and the CEO this morning, and the message is clear: we will not bid if separation is not taken off the table."
Mr Egan, a former NSW treasurer and the incumbent Chancellor of Macquarie University, makes clear his consortium's difference with Telstra.
"We're arguing that the National Broadband Network should be completely independent of any existing retailer, or even upstream user like a media company or content provider," Mr Egan said.
"That ensures that this network company has a commercial interest in treating everybody equally. Its commercial interest lies in maximising traffic on that network, which means that it has an interest in encouraging competition and encouraging innovation.
"If the network is owned by Telstra, or even Optus or any other major retail player, there is a commercial incentive to run the network to benefit your own retail activities."
* More on the broadband debate in this week's Rural Press weekly agricultural newspapers.
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